Section 1.

2003 Iowa Acts, Senate File 458, section 48,

unnumbered paragraphs 1 and 2, if enacted, are amended to read

as follows:

There is appropriated from the general fund of the state to

the salary adjustment fund for distribution by the department

of management to the various state departments, boards,

commissions, councils, and agencies, and to the state board of

regents for those persons employed at the state school for the

deaf and the Iowa braille and sight saving school, for the

fiscal year beginning July 1, 2003, and ending June 30, 2004,

the amount of $28,000,000$30,000,000, or so much thereof as

may be necessary, to fully fund annual pay adjustments,

expense reimbursements, and related benefits implemented

pursuant to the following:

Of the amount appropriated in this section, $2,668,000

$2,818,000 shall be allocated to the judicial branch for the

purpose of funding annual pay adjustments, expense

reimbursements, and related benefits implemented for judicial

branch employees. In distributing the remainder of the amount

appropriated in this section, the department of management, in

order to address essential public protection functions and

recognizing the availability of funds appropriated in other

Acts of the general assembly and other sources, shall give

priority, in descending order, to the department of

corrections, department of human services, and department of

public safety, and then to the remaining state departments,

boards, commissions, councils, and agencies to which the

appropriation is applicable.

Sec. 2.

STATE COURTS — JUSTICES, JUDGES, AND MAGISTRATES.

1. Of the amount allocated for the judicial branch in 2003

Iowa Acts, Senate File 458, section 48, if enacted, $150,000

is allocated to fund the changes in this section to the

salaries of justices, judges, and magistrates.

2. The following annual salary rates shall be paid to the

persons holding the judicial positions indicated during the

fiscal year beginning July 1, 2003, effective with the pay

period beginning December 5, 2003, and for subsequent pay

periods:

a. Chief justice of the supreme court:

.................................................. $ 127,040

b. Each justice of the supreme court:

.................................................. $ 122,500

c. Chief judge of the court of appeals:

.................................................. $ 122,380

d. Each associate judge of the court of appeals:

.................................................. $ 117,850

e. Each chief judge of a judicial district:

.................................................. $ 116,760

f. Each district judge except the chief judge of a

judicial district:

.................................................. $ 112,010

g. Each district associate judge:

.................................................. $ 97,610

h. Each associate juvenile judge:

.................................................. $ 97,610

i. Each associate probate judge:

.................................................. $ 97,610

j. Each judicial magistrate:

.................................................. $ 29,100

k. Each senior judge:

.................................................. $ 6,500

3. Persons receiving the salary rates established under

subsection 2 shall not receive any additional salary

adjustments provided by 2003 Iowa Acts, Senate File 458,

division V.

Sec. 3.

INSURANCE STUDY.

There is appropriated from the

general fund of the state to the department of commerce for

the fiscal year beginning July 1, 2003, and ending June 30,

2004, the following amount, or so much thereof as is

necessary, to be used for the purpose designated:

For the insurance division to implement the school health

insurance reform team study in accordance with 2003 Iowa Acts,

Senate File 386:

.................................................. $ 15,000

Sec. 4.

LOCAL GOVERNMENT INNOVATION FUND APPROPRIATION.

There is appropriated from the general fund of the state to

the department of management for the fiscal year beginning

July 1, 2003, and ending June 30, 2004, the following amount,

or so much thereof as is necessary, to be used for the purpose

designated:

For deposit in the local government innovation fund created

in section 8.64:

.................................................. $ 1,000,000

Notwithstanding section 8.64, subsection 4, if enacted by

2003 Iowa Acts, Senate File 453, section 27, the local

government innovation fund committee may provide up to 20

percent of the amount appropriated in this section in the form

of forgivable loans or as grants for those projects that

propose a new and innovative sharing initiative that would

serve as an important model for cities and counties.

Sec. 5.

COUNTY HOSPITALS.

There is appropriated from the

general fund of the state to the department of human services

for the fiscal year beginning July 1, 2003, and ending June

30, 2004, the following amount, or so much thereof as is

necessary, for the purpose designated:

For support of mental health care services provided to

persons who are elderly or poor by county hospitals in

counties having a population of two hundred twenty-five

thousand or more:

.................................................. $ 312,000

Sec. 6.

2003 Iowa Acts, House File 667, section 13,

subsection 2, is amended to read as follows:

2. The department may either continue or reprocure the

contract existing on June 30, 2003, with the department's

fiscal agent. If the department initiates reprocurement of

the contract, of the amount appropriated in this Act for the

medical assistance program, up to $500,000 may be used to

begin the implementation process.

Sec. 7.

There is appropriated from the rebuild Iowa

infrastructure fund to the department of corrections for the

fiscal year beginning July 1, 2003, and ending June 30, 2004,

the following amounts, or so much thereof as is necessary, to

be used for the purposes designated:

1. For expansion of the Luster Heights facility into a

community-based corrections facility and an institutional work

and substance abuse treatment center:

.................................................. $ 92,000

2. For conversion of the Clarinda lodge into minimum

security bed space:

.................................................. $ 730,400

Sec. 8.

2003 Iowa Acts, Senate File 439, section 4,

subsection 1, paragraphs b and g, as enacted, are amended to

read as follows:

b. For the operation of the Anamosa correctional facility,

including salaries, support, maintenance, employment of

correctional officers and a part-time chaplain to provide

religious counseling to inmates of a minority race,

miscellaneous purposes, and for not more than the following

full-time equivalent positions:

.................................................. $ 24,531,917

25,196,085

............................................... FTEs 375.75

385.25

Moneys are provided within this appropriation for one full-

time substance abuse counselor for the Luster Heights

facility, for the purpose of certification of a substance

abuse program at that facility. Of the funds appropriated in

this paragraph "b", $664,168 is allocated for implementation

costs associated with expansion of the Luster Heights

facility.

g. For the operation of the Clarinda correctional

facility, including salaries, support, maintenance, employment

of correctional officers, miscellaneous purposes, and for not

more than the following full-time equivalent positions:

.................................................. $ 18,595,788

19,389,220

............................................... FTEs 291.76

304.58

Moneys received by the department of corrections as

reimbursement for services provided to the Clarinda youth

corporation are appropriated to the department and shall be

used for the purpose of operating the Clarinda correctional

facility.

Of the funds appropriated in this paragraph "g", $793,432

is allocated for implementation costs associated with

expansion of the conversion of the Clarinda lodge, with

$277,500 of the allocation for one-time costs and $515,932 for

ongoing costs.

Sec. 9.

2003 Iowa Acts, Senate File 458, section 8, if

enacted, is amended to read as follows:

SEC.

8. PUBLIC TRANSIT ASSISTANCE APPROPRIATION.

Notwithstanding section 312.2, subsection 14, the amount

appropriated from the general fund of the state under section

312.2, subsection 14, to the state department of

transportation for public transit assistance under chapter

324A for the fiscal year beginning July 1, 2003, and ending

June 30, 2004, is reduced by the following amount:

.................................................. $ 1,298,675

2,582,800

Sec. 10.

2003 Iowa Acts, House File 655, section 5,

subsection 1, if enacted, is amended to read as follows:

1. GENERAL OFFICE

For salaries, support, maintenance, and miscellaneous

purposes for the general office of the governor and the

general office of the lieutenant governor, and for not more

than the following full-time equivalent positions:

.................................................. $ 1,243,643

1,493,643

............................................... FTEs 17.25

19.25

Of the amount appropriated in this section, $250,000 is

allocated for two full-time equivalent positions in the office

of the governor that were previously funded by other state

departments and agencies.

Sec. 11.

2003 Iowa Acts, House File 655, section 31, if

enacted, is amended to read as follows:

SEC.

31. DEPARTMENT OF REVENUE. There is appropriated

from the general fund of the state to the department of

revenue for the fiscal year beginning July 1, 2003, and ending

June 30, 2004, the following amounts, or so much thereof as is

necessary, to be used for the purposes designated, and for not

more than the following full-time equivalent positions used

for the purposes designated in subsection 1:

............................................... FTEs 378.87

380.87

Of the full-time equivalent positions authorized in this

section, two full-time equivalent positions are allocated for

new positions to assist in preparation of information for the

revenue estimating conference and in improving the turnaround

time for processing corporate tax filings.

1. COMPLIANCE — INTERNAL RESOURCES MANAGEMENT — STATE

FINANCIAL MANAGEMENT — STATEWIDE PROPERTY TAX ADMINISTRATION

For salaries, support, maintenance, and miscellaneous

purposes:

.................................................. $ 23,259,111

23,359,111

Of the funds appropriated pursuant to this subsection,

$400,000 shall be used to pay the direct costs of compliance

related to the collection and distribution of local sales and

services taxes imposed pursuant to chapters 422B and 422E.

The director of revenue shall prepare and issue a state

appraisal manual and the revisions to the state appraisal

manual as provided in section 421.17, subsection 18, without

cost to a city or county.

2. COLLECTION COSTS AND FEES

For payment of collection costs and fees pursuant to

section 422.26:

.................................................. $ 28,166

Sec. 12.

2003 Iowa Acts, House File 667, section 2,

subsection 8, as enacted, is amended to read as follows:

8. INFECTIOUS DISEASES

For reducing the incidence and prevalence of communicable

diseases, and for not more than the following full-time

equivalent positions:

.................................................. $ 977,340

1,074,888

............................................... FTEs 36.90

Sec. 13.

GOVERNMENT OVERSIGHT COMMITTEE — REVIEW OF CONTINUING CARE RETIREMENT COMMUNITIES — ASSISTED LIVING PROGRAM APPLICABILITY.

The government oversight committees

shall review the application of chapter 231C, relating to

assisted living programs, to continuing care retirement

communities, as defined in section 523D.1. The committees

shall submit recommendations for any legislation deemed

necessary for consideration during the 2004 regular

legislative session.

Sec. 14.

Section 7J.1, subsection 1, as enacted by 2003

Iowa Acts, Senate File 453, section 32, and amended by 2003

Iowa Acts, Senate File 458, section 85, is amended to read as

follows:

1. DESIGNATION OF CHARTER AGENCIES — PURPOSE. The

governor may, by executive order, designate state departments

or agencies, as described in section 7E.5, or the Iowa lottery

authority established in chapter 99G, other than the

department of administrative services, if the department is

established in law, or the department of management, as a

charter agency by July 1, 2003. The designation of a charter

agency shall be for a period of five years which shall

terminate as of June 30, 2008. The purpose of designating a

charter agency is to grant the agency additional authority as

provided by this chapter while reducing the total

appropriations to the agency.

Sec. 15. Section 15E.193B, subsection 4, Code 2003, as amended by 2003 Iowa Acts, Senate File 458, section 100, if enacted, is amended to read as follows:

4. The eligible housing business shall complete its

building or rehabilitation within two years from the time the

business begins construction on the single-family homes and

dwelling units. The failure to complete construction or

rehabilitation within two years shall result in the eligible

housing business becoming ineligible and subject to the

repayment requirements and penalties enumerated in subsection

7. The department may extend the prescribed two-year

completion period for any current or future project which has

not been completed if the department determines that

completion within the two-year period is impossible or

impractical as a result of a substantial loss caused by flood,

fire, earthquake, storm, or other catastrophe. For purposes

of this subsection, "substantial loss" means damage or

destruction in an amount in excess of thirty percent of the

project's expected eligible basis as set forth in the eligible

housing business's application.

Sec. 16. Section 215.14, Code 2003, is amended to read as follows:

215.14 APPROVAL BY DEPARTMENT.

A commercial weighing and measuring device shall not be

installed in this state unless approved by the department.

All livestock scales and

1. A pit type scalesscale or any other scale installed in

a pit, regardless of capacity, that is installed on or after

July 1, 1990, shall have a clearance of not less than four

feet from the finished floor line of the scale to the bottom

of the "I" beam of the scale bridge. Livestock shall not be

weighed on any scale other than a livestock scale or pit type

scale.

2. An electronic pitless scale shall be placed on concrete

footings with concrete floor. The concrete floor shall allow

for adequate drainage away from the scale as required by the

department. There shall be a clearance of not less than eight

inches between the weigh bridge and the concrete floor to

facilitate inspection and cleaning.

3. After approval by the department, the specifications

for a commercial weighing and measuring device shall be

furnished to the purchaser of the device by the manufacturer.

The approval shall be based upon the recommendation of the

United States national institute of standards and technology.

Sec. 17.

Section 231C.17, subsection 4, if enacted by 2003

Iowa Acts, House File 675, section 24, is amended by striking

the subsection and inserting in lieu thereof the following:

4. A continuing care retirement community, as defined in

section 523D.1, may provide limited personal care services and

emergency response services to its independent living tenants

if all of the following conditions are met:

a. The provision of such personal care services or

emergency response services does not result in inadequate

staff coverage to meet the service needs of all tenants of the

continuing care retirement community.

b. The staff providing the personal care or emergency

response services is trained or qualified to the extent

necessary to provide such services.

c. The continuing care retirement community documents the

date, time, and nature of the personal care or emergency

response services provided.

d. Emergency response services are only provided in

situations which constitute an urgent need for immediate

action or assistance due to unforeseen circumstances.

This subsection shall not be construed to prohibit an

independent living tenant of a continuing care retirement

community from contracting with a third party for personal

care or emergency response services.

Sec. 18. NEW SECTION 237A.25 CONSUMER INFORMATION.

1. The department shall develop consumer information

material to assist parents in selecting a child care provider.

In developing the material, the department shall consult with

department of human services staff, department of education

staff, the state child care advisory council, the Iowa

empowerment board, and child care resource and referral

services. In addition, the department may consult with other

entities at the local, state, and national level.

2. The consumer information material developed by the

department for parents and other consumers of child care

services shall include but is not limited to all of the

following:

a. A pamphlet or other printed material containing

consumer-oriented information on locating a quality child care

provider.

b. Information explaining important considerations a

consumer should take into account in selecting a licensed or

registered child care provider.

c. Information explaining how a consumer can identify

quality services, including what questions to ask of providers

and what a consumer might expect or demand to know before

selecting a provider.

d. An explanation of the applicable laws and regulations

written in layperson's terms.

e. An explanation of what it means for a provider to be

licensed, registered, or unregistered.

f. An explanation of the information considered in

registry and record background checks.

g. Other information deemed relevant to consumers.

3. The department shall implement and publicize an

internet page or site that provides all of the following:

a. The written information developed pursuant to

subsections 1 and 2.

b. Regular informational updates, including when a child

care provider was last subject to a state quality review or

inspection and, based upon a final score or review, the

results indicating whether the provider passed or failed the

review or inspection.

c. Capability for a consumer to be able to access

information concerning child care providers, such as

informational updates, identification of provider location,

name, and capacity, and identification of providers

participating in the state child care assistance program and

those participating in the child care food program, by sorting

the information or employing other means that provide the

information in a manner that is useful to the consumer.

Information regarding provider location shall identify

providers located in the vicinity of an address selected by a

consumer and provide contact information without listing the

specific addresses of the providers.

d. Other information deemed appropriate by the department.

Sec. 19. Section 384.84, Code 2003, is amended by adding the following new subsection:

NEW SUBSECTION 9. Notwithstanding subsection 3, a lien

shall not be filed against the land if the premises are

located on leased land. If the premises are located on leased

land, a lien may be filed against the premises only.

Sec. 20.

Section 422E.3A, subsection 2, paragraph a, if

enacted by 2003 Iowa Acts, Senate File 445, section 8, is

amended to read as follows:

a. A school district that is located in whole or in part

in a county that voted on and approved prior to April 1, 2003,

the local sales and services tax for school infrastructure

purposes and that has a sales tax capacity per student above

the guaranteed school infrastructure amount shall receive for

the remainder of the term of the tax an amount equal to its

pro rata share of the local sales and services tax receipts as

provided in section 422E.3, subsection 5, paragraph "d",

unless the school board passes a resolution by October 1,

2003, agreeing to receive a distribution pursuant to paragraph

"b", subparagraph (1).

Sec. 21.

Section 422E.3A, subsection 2, paragraph b,

subparagraph (1), if enacted by 2003 Iowa Acts, Senate File

445, section 8, is amended to read as follows:

(1) A school district that is located in whole or in part

in a county that voted on and approved prior to April 1, 2003,

the local sales and services tax for school infrastructure

purposes and that has a sales tax capacity per student below

its guaranteed school infrastructure amount shall receive for

the remainder of the term of the tax an amount equal to its

pro rata share of the local sales and services tax receipts as

provided in section 422E.3, subsection 5, paragraph "d", plus

an amount equal to its supplemental school infrastructure

amount, unless the school district passes a resolution by

October 1, 2003, agreeing to receive only an amount equal to

its pro rata share as provided in section 422E.3, subsection

5, paragraph "d", in all subsequent years.

Sec. 22.

Section 422E.3A, subsection 3, paragraph a, as

enacted by 2003 Iowa Acts, Senate File 445, is amended to read

as follows:

a. The director of revenue and finance by June 1 preceding

each fiscal year shall compute the guaranteed school

infrastructure amount for each school district, each school

district's sales tax capacity per student for each county, the

statewide tax revenues per student, and the supplemental

school infrastructure amount for the coming fiscal year.

Sec. 23.

Section 422E.3A, subsection 3, paragraph b,

subparagraph (3), as enacted by 2003 Iowa Acts, Senate File

445, is amended by striking the subparagraph and inserting in

lieu thereof the following:

(3) "Statewide tax revenues per student" means five

hundred seventy-five dollars per student. The general

assembly shall review this amount annually to determine its

appropriateness.

Sec. 24.

Section 422E.3A, subsection 5, as enacted by 2003

Iowa Acts, Senate File 445, is amended to read as follows:

5. In the case of a deficiency in the fund to pay the

supplemental school infrastructure amounts in full, the amount

available in the fund less the sales and services tax revenues

for school infrastructure purposes attributed to each school

district should be allocated based on the proportion of actual

enrollment in the district to the combined actual enrollment

in the counties where the sales and services tax for school

infrastructure purposes has been imposed and the school

districts in the counties qualify for the supplemental school

infrastructure amountfirst to increase the school district

with the lowest sales tax capacity per student to an amount

equal to the school district or school districts with the next

lowest sales tax capacity per student and then increase the

school districts to an amount equal to the school district or

school districts with the next lowest sales tax capacity per

student and continue on in this manner until money is no

longer available or all school districts reach their

guaranteed school infrastructure amount.

Sec. 25.

Section 422E.3A, subsection 6, unnumbered

paragraph 1, as enacted by 2003 Iowa Acts, Senate File 445, is

amended to read as follows:

A school district with less than two hundred fifty actual

enrollment or less than one hundred actual enrollment in the

high school shall not expend the supplemental school

infrastructure amount received for new construction or for

payments for bonds issued for new construction against the

supplemental school infrastructure amount without prior

application to the department of education and receipt of a

certificate of need pursuant to this subsection. However, a

certificate of need is not required for the payment of

outstanding bonds issued for new construction pursuant to

section 296.1, before April 1, 2003. A certificate of need is

also not required for repairing schoolhouses or buildings,

equipment, technology, or transportation equipment for

transporting students as provided in section 298.3, or for

construction necessary for compliance with the federal

Americans With Disabilities Act pursuant to 42 U.S.C. § 12101-

12117. In determining whether a certificate of need shall be

issued or denied, the department shall consider all of the

following:

Sec. 26.

Section 435.26A, subsection 5, as enacted by 2003

Iowa Acts, Senate File 134, section 7, and as amended by 2003

Iowa Acts, Senate File 458, section 128, if enacted, is

amended to read as follows:

5. An owner of a manufactured home who has surrendered a

certificate of title under this section and requires another

certificate of title for the manufactured home is required to

apply for a certificate of title under section 321.42chapter

321. If supporting documents for the reissuance of a title

are not available or sufficient, the procedure for the

reissuance of a title specified in the rules of the department

of transportation shall be used.

Sec. 27. Section 459.315, Code 2003, as amended by 2003 Iowa Acts, House File 644, if enacted, is amended by adding the following new subsection:

NEW SUBSECTION 4A. This section shall not require a

person to be certified as a confinement site manure applicator

if the person applies manure which originates from a manure

storage structure which is part of a small animal feeding

operation.

Sec. 28.

Section 508.31A, subsection 2, paragraph a,

subparagraph (4), as enacted by 2003 Iowa Acts, House File

647, section 7, is amended to read as follows:

(4) A person other than a natural person for the purpose

of providing collateral security for securities issued by such

person and registered with the federal securities and exchange

commission.

Sec. 29.

2003 Iowa Acts, Senate File 401, section 5,

subsection 1, is amended to read as follows:

1. Notwithstanding any provision of law to the contrary,

the section of this Act creating section 453A.2, subsection

5A, is applicable to violations pending on the effective date

of this Act for which a penalty has not been assessed under

section 453A.22, subsection 2. Notwithstanding this

subsection, however, if a county health department, a city

health department, or a city assesses a penalty under section

453A.22, subsection 2, on or after April 11, 2003 but prior to

June 30, 2003, for a violation of section 453A.2, subsection

1, which was pending on April 11, 2003, the county health

department, city health department or city assessing the

penalty shall be deemed to have jurisdiction to assess the

penalty and the penalty assessed is deemed valid.

Sec. 30.

2003 Iowa Acts, Senate File 458, section 21,

unnumbered paragraph 3, if enacted, is amended to read as

follows:

Of the funds appropriated in this section, up to $10,000 is

transferred to the Iowa department of public healthhuman

services for allocation to community mental health centers to

provide counseling services to persons who are members of the

national guard and reservists activated but as yet not sent to

combat zones and to the persons' family members. The sessions

shall be provided on a first come, first served basis and

shall be limited to three visits per family.

Sec. 31.

2003 Iowa Acts, Senate File 458, section 149, if

enacted, is amended to read as follows:

SEC.

149. SUPPLEMENTAL PAYMENT ADJUSTMENTS FOR PHYSICIAN

SERVICES. To the extent that, pursuant to law enacted by the

Eightieth General Assembly, 2003 Session, supplemental payment

adjustments are implemented for physician services provided to

medical assistance program participants at publicly owned

acute care hospitals, the department of human services shall

not, directly or indirectly, recoup the supplemental payment

adjustments for any reason, unless an amount equivalent to the

amount of adjustment funds that wereis first transferred to

the department by the state university of Iowa college of

medicine is transferred by the department to the qualifying

physicians. Any such amount transferred and identified as a

supplemental payment under this section shall then be refunded

to the department of human services, per the agreement

executed for this purpose between the department and the

university of Iowa.

Sec. 32.

2003 Iowa Acts, House File 667, section 27,

subsection 1, unnumbered paragraph 2, is amended to read as

follows:

For costs associated with the commitment and treatment of

sexually violent predators in the unit located at the state

mental health institute at Cherokee, including costs of legal

services and other associated costs, including salaries,

support, maintenance, and miscellaneous purposes and for not

more than the following full-time equivalent positions:

.................................................. $ 2,675,179

............................................... FTEs 46.00

57.00

Sec. 33.

EFFECTIVE DATE — RETROACTIVE APPLICABILITY.

1. The section of this division of this Act amending

section 231C.17, being deemed of immediate importance, takes

effect upon enactment.

2. The section of this division of this Act amending 2003

Iowa Acts, Senate File 401, being deemed of immediate

importance, takes effect upon enactment and is retroactively

applicable to April 11, 2003.

Sec. 34.

Section 8A.505, as enacted by 2003 Iowa Acts,

House File 534, section 87, is amended by adding the following

new unnumbered paragraph:

NEW UNNUMBERED PARAGRAPH. There is appropriated annually

from the increase in indirect cost reimbursements over the

amount of indirect cost reimbursements received during the

fiscal year beginning July 1, 2002, to the office of grants

enterprise management of the department of management the sum

of up to one hundred twenty-five thousand dollars. The

director shall transfer the funds appropriated to the

department of management as provided in this paragraph and

shall make the funds resulting from the increase in

reimbursements available during the fiscal year to the

department of management on a monthly basis. If the amount of

the increase in indirect cost reimbursements is insufficient

to pay the maximum appropriation provided for in this

paragraph, the amount appropriated is equal to the amount of

such increase.

Sec. 35. Section 12C.4, Code 2003, as amended by 2003 Iowa Acts, House File 289, section 2, is amended to read as follows:

12C.4 LOCATION OF DEPOSITORIES.

Deposits by the treasurer of state shall be in depositories

located in this state; by a county officer or county public

hospital officer or merged area hospital officer, in

depositories located in the county or in an adjoining county

within this state; by a memorial hospital treasurer, in a

depository located within this state which shall be selected

by the memorial hospital treasurer and approved by the

memorial hospital commission; by a city treasurer or other

city financial officer, in depositories located in the county

in which the city is located or in an adjoining county, but if

there is no depository in the county in which the city is

located or in an adjoining county then in any other depository

located in this state which shall be selected as a depository

by the city council; by a school treasurer or by a school

secretary in a depository within this state which shall be

selected by the board of directors or the trustees of the

school district; by a township clerk in a depository located

within this state which shall be selected by the township

clerk and approved by the trustees of the township. However,

deposits may be made in depositories outside of Iowa for the

purpose of paying principal and interest on bonded

indebtedness of any municipality when the deposit is made not

more than ten days before the date the principal or interest

becomes due. Further, the treasurer of state may maintain an

account or accounts outside the state of Iowa for the purpose

of providing custodial services for the state and state

retirement fund accounts. Deposits made for the purpose of

completing an electronic financial transaction pursuant to

section 14B.2038A.222 or 331.427 may be made in any

depository located in this state.

Sec. 36.

Section 29A.28, subsection 3, as enacted by 2003

Iowa Acts, House File 674, section 3, is amended to read as

follows:

3. Upon returning from a leave of absence under this

section, an employee shall be entitled to return to the same

position and classification held by the employee at the time

of entry ontointo state active duty, active state service, or

federal service or to the position and classification that the

employee would have been entitled to if the continuous civil

service of the employee had not been interrupted by state

active duty, active state service, or federal service. Under

this subsection, "position" includes the geographical location

of the position.

Sec. 37.

Section 70A.39, subsection 1, paragraph b, as

enacted by 2003 Iowa Acts, House File 381, section 1, is

amended to read as follows:

b. "Vascularized"Vascular organ" means a heart, lung,

liver, pancreas, kidney, intestine, or other organ that

requires the continuous circulation of blood to remain useful

for purposes of transplantation.

Sec. 38. Section 99B.7, subsection 1, paragraph 1, subparagraph (1), Code 2003, as amended by 2003 Iowa Acts, Senate File 453, section 104, if enacted, is amended to read as follows:

(1) No other gambling is engaged in at the same location,

except that lottery tickets or shares issued by the Iowa

lottery division of the department of revenue and finance

authority may be sold pursuant to chapter 99G.

Sec. 39.

Section 507A.4, subsection 9, paragraph e, as

enacted by 2003 Iowa Acts, House File 647, section 4, is

amended to read as follows:

e. When not otherwise provided, a foreign or domestic

multiple employeeemployer welfare arrangement doing business

in this state shall pay to the commissioner of insurance the

fees as required in section 511.24.

Sec. 40. Section 556.11, subsection 5, Code 2003, as amended by 2003 Iowa Acts, Senate File 180, section 2, is amended to read as follows:

5. If the holder of property presumed abandoned under this

chapter knows the whereabouts of the owner and if the owner's

claim has not been barred by the statute of limitations, the

holder shall, before filing the annual report, communicate

with the owner and take necessary steps to prevent abandonment

from being presumed. The holder shall exercise due diligence

to ascertain the whereabouts of the owner. A holder is not

required to make a due diligence mailing to owners whose

property has an aggregate value of less than fifty dollars.

The treasurer of state may charge a holder that fails to

timely exercise due diligence, as required in this subsection,

five dollars for each name and address account reported if

thirty-five percent ofor more of the accounts are claimed

within the twenty-four months immediately following the filing

of the holder report.

Sec. 41.

2003 Iowa Acts, Senate File 438, section 3, is

repealed.

Sec. 42.

2003 Iowa Acts, Senate File 453, section 11, if

enacted, is amended to read as follows:

SEC.

11. Sections 403.23, 405A.1, 405A.2, 405A.3, 405A.4,

405A.5, 405A.6, 405A.7, 405A.8, 405A.9, 405A.10, 422.65,

427A.12, and 427B.19B, Code 2003, are repealed.

Sec. 43.

2003 Iowa Acts, Senate File 458, section 159, if

enacted, is amended to read as follows:

SEC.

159. EFFECTIVE DATES. The following provisions of

this division of this Act, being deemed of immediate

importance, take effect upon enactment:

1. The amendments to sections 8.23, 8.31, and 8.57 which

are first applicable to appropriations made for the fiscal

year beginning July 1, 2003.

2. The amendment to section 12E.12.

3. The amendments to sections 15E.42, 15E.43, 15E.45, and

15E.51, which apply retroactively to January 1, 2002, for tax

years beginning on or after that date.

4. The amendment to section 15E.193B.

5. The amendment to section 435.26A.

6. The amendment to section 453A.2, which shall only take

effect if 2003 Iowa Acts, Senate File 401, is enacted by the

Eightieth General Assembly, 2003 Regular Session.

7. The amendments to sections 453C.1 and 453C.2 and the

related severability provision.

8. The amendments to sections 518.18 and 518A.35.

9. The section directing the department of corrections to

develop a plan for selling certain land.

10. The section relating to the sales and use tax refund.

11. The section relating to the school district

reimbursement claim.

The sections of this division of this Act amending section

80B.5 and enacting section 80B.5A are applicable to the

appointment of the director of the Iowa law enforcement

academy for the term beginning May 1, 2004.

Section 29C.8, subsection 3, paragraph "f", as enacted in

this division of this Act, and the amendment to section

29C.20, subsection 1, as enacted in this division of this Act,

take effect July 1, 2004.

Sec. 44.

2003 Iowa Acts, House File 171, section 112, the

bill section amending clause, is amended to read as follows:

Section 656.2, subsection 2, paragraph a, unnumbered

paragraph 113, Code 2003, is amended to read as follows:

Sec. 45.

2003 Iowa Acts, House File 662, section 5,

subsection 8, paragraphs a and b, if enacted, are amended to

read as follows:

a. Of the amount appropriated in this sectionsubsection,

$347,371 shall be allocated to the public broadcasting

division for purposes of providing support for functions

related to the Iowa communications network, including but not

limited to the following functions: development of distance

learning applications; development of a central information

source on the internet relating to educational uses of the

network; second-line technical support for network sites;

testing and initializing sites onto the network; and

coordinating the work of the education telecommunications

council.

b. Of the amount appropriated in this sectionsubsection,

$1,272,285 shall be allocated to the regional

telecommunications councils established in section 8D.5. The

regional telecommunications councils shall use the funds to

provide technical assistance for network classrooms, planning

and troubleshooting for local area networks, scheduling of

video sites, and other related support activities.

Sec. 46.

2003 Iowa Acts, House File 662, section 6,

unnumbered paragraph 2, if enacted, is amended to read as

follows:

The funds allocated in this subsectionsection shall be

distributed as follows:

Sec. 47.

EFFECTIVE AND APPLICABILITY DATES.

1. The section of this division of this Act amending

section 29A.28, subsection 3, being deemed of immediate

importance, takes effect upon enactment and applies

retroactively to January 1, 2003.

2. The section of this division of this Act amending 2003

Iowa Acts, Senate File 458, section 159, being deemed of

immediate importance, takes effect upon enactment.

3. 2003 Iowa Acts, Senate File 458, section 140, relating

to nonreversion of funds appropriated in 1996 Iowa Acts,

chapter 1218, and 1997 Iowa Acts, chapter 215, if enacted,

being deemed of immediate importance, takes effect upon

enactment of this Act.

Sec. 48. Section 321J.2, subsection 2, paragraph a, subparagraph (1), Code 2003, is amended to read as follows:

(1) Imprisonment in the county jail for not less than

forty-eight hours, to be served as ordered by the court, less

credit for any time the person was confined in a jail or

detention facility following arrest or for any time the person

spent in a court-ordered operating-while-intoxicated program

that provides law enforcement security. However, the court,

in ordering service of the sentence and in its discretion, may

accommodate the defendant's work schedule.

Sec. 49. NEW SECTION 811.2A PRETRIAL RELEASE.

A person, who has been released under a plan of pretrial

release or on the person's own recognizance and who is

subsequently arrested for a new criminal offense while under

the plan of pretrial release or released on the person's own

recognizance, shall not be eligible for another release

pursuant to pretrial release guidelines or released on the

person's own recognizance, if all of the following apply:

1. The arrest for the new criminal offense is based on a

set of facts or an event that is different than involved in

the earlier arrest.

2. The new criminal offense is classified as greater than

a serious misdemeanor.

However, a person may be admitted to bail if eligible

pursuant to section 811.1.

Sec. 50. Section 901.4, Code 2003, is amended to read as follows:

901.4 PRESENTENCE INVESTIGATION REPORT CONFIDENTIAL — DISTRIBUTION.

The presentence investigation report is confidential and

the court shall provide safeguards to ensure its

confidentiality, including but not limited to sealing the

report, which may be opened only by further court order. At

least three days prior to the date set for sentencing, the

court shall serve all of the presentence investigation report

upon the defendant's attorney and the attorney for the state,

and the report shall remain confidential except upon court

order. However, the court may conceal the identity of the

person who provided confidential information. The report of a

medical examination or psychological or psychiatric evaluation

shall be made available to the attorney for the state and to

the defendant upon request. The reports are part of the

record but shall be sealed and opened only on order of the

court. If the defendant is committed to the custody of the

Iowa department of corrections and is not a class "A" felon, a

copy of the presentence investigation report shall be

forwarded to the director with the order of commitment by the

clerk of the district court and to the board of parole at the

time of commitment. ThePursuant to section 904.602, the

presentence investigation report may also be released by the

department of corrections or a judicial district department of

correctional services pursuant to section 904.602 to another

jurisdiction for the purpose of providing interstate probation

and parole compact services or evaluations, or to a substance

abuse or mental health services provider when referring a

defendant for services. The defendant or the defendant's

attorney may file with the presentence investigation report, a

denial or refutation of the allegations, or both, contained in

the report. The denial or refutation shall be included in the

report. If the person is sentenced for an offense which

requires registration under chapter 692A, the court shall

release the report to the department which is responsible

under section 692A.13A for performing the assessment of risk.

Sec. 51. Section 901B.1, subsection 1, paragraph c, subparagraph (5), Code 2003, is amended to read as follows:

(5) A substance abuse treatment facility as established

and operated by the Iowa department of public health or the

department of corrections.

Sec. 52. Section 903A.2, subsection 1, paragraph a, Code 2003, is amended to read as follows:

a. Category "A" sentences are those sentences which are

not subject to a maximum accumulation of earned time of

fifteen percent of the total sentence of confinement under

section 902.12. To the extent provided in subsection 5,

category "A" sentences also include life sentences imposed

under section 902.1. An inmate of an institution under the

control of the department of corrections who is serving a

category "A" sentence is eligible for a reduction of sentence

equal to one and two-tenths days for each day the inmate

demonstrates good conduct and satisfactorily participates in

any program or placement status identified by the director to

earn the reduction. The programs include but are not limited

to the following:

(1) Employment in the institution.

(2) Iowa state industries.

(3) An employment program established by the director.

(4) A treatment program established by the director.

(5) An inmate educational program approved by the

director.

An inmate serving a category "A" sentence is eligible for

an additional reduction of sentence of up to three hundred

sixty-five days of the full term of the sentence of the inmate

for exemplary acts. In accordance with section 903A.4, the

director shall by policy identify what constitutes an

exemplary act that may warrant an additional reduction of

sentence.

Sec. 53. Section 903A.3, subsection 2, Code 2003, is amended to read as follows:

2. The orders of the administrative law judge are subject

to appeal to the superintendent or warden of the institution,

or the superintendent's or warden's designee, who may either

affirm, modify, remand for correction of procedural errors, or

reverse an order. However, sanctions shall not be increased

on appeal. A decision of the superintendent, warden, or

designee is subject to review by the director of the Iowa

department of corrections who may either affirm, modify,

remand for correction of procedural errors, or reverse the

decision. However, sanctions shall not be increased on

review.

Sec. 54. NEW SECTION 904.117 INTERSTATE COMPACT FUND.

An interstate compact fund is established under the control

of the department. All interstate compact fees collected by

the department pursuant to section 907B.5 shall be deposited

into the fund and the moneys shall be used by the department

to offset the costs of complying with the interstate compact

for adult offender supervision in chapter 907B.

Notwithstanding section 8.33, moneys remaining in the fund at

the end of a fiscal year shall not revert to the general fund

of the state. Notwithstanding section 12C.7, interest and

earnings deposited in the fund shall be credited to the fund.

Sec. 55. Section 904.503, subsection 2, Code 2003, is amended to read as follows:

2. When the director has cause to believe that an inmate

in a state correctional institution is mentally ill, the Iowa

department of corrections may cause the inmate to be

transferred to the Iowa medical and classification center, or

to another appropriate facility within the department, for

examination, diagnosis, or treatment. The inmate shall be

confined at that institutioncenter or facility or a state

hospital for persons with mental illness until the expiration

of the inmate's sentence or until the inmate is pronounced in

good mental health. If the inmate is pronounced in good

mental health before the expiration of the inmate's sentence,

the inmate shall be returned to the state correctional

institution until the expiration of the inmate's sentence.

Sec. 56. Section 904.508, subsection 2, Code 2003, is amended to read as follows:

2. ThePursuant to section 904.702, the director shall

establish and maintain an inmate savings fund in an interest-

bearing account for the deposit of all or part of an inmate's

allowances, as provided in section 904.702and amounts, except

amounts directed to be deposited in the inmate telephone fund

established in section 904.508A, sent to the inmate from a

source other than the department. All or part of an inmate's

allowances and amounts, except amounts directed to be

deposited in the inmate telephone fund established in section

904.508A, from a source other than the department shall be

deposited into the savings fund, until the inmate's deposit is

equal to the amount due the inmate upon discharge, parole, or

placement on work release,one hundred dollars as provided in

section 906.9. If an inmate's deposits are equal this amount

to or in excess of one hundred dollars, the inmate may

voluntarily withdraw from the savings fund. The director

shall notify the inmate of this right to withdraw and shall

provide the inmate with a written request form to facilitate

the withdrawal. If the inmate withdraws and the inmate's

deposits exceed the amount due as provided in section 906.9,

the director shall disburse the excess amount as provided for

allowances under section 904.702, except the director shall

not deposit the excess amount in the inmate savings fund. If

the inmate chooses to continue to participate in the savings

fund, the inmate's deposits shall be returned to the inmate

upon discharge, parole, or placement on work release.

Otherwise, the inmate's deposits shall be disposed of as

provided in subsection 3. An inmate's deposits into the

savings fund may be used to provide the money due the inmate

upon discharge, parole, or placement on work release, as

required under section 906.9. Interest earned from the

savings fund shall be placed in a separate account, and may be

used for purchases approved by the director to directly and

collectively benefit inmates.

Sec. 57. Section 904.508A, Code 2003, is amended to read as follows:

904.508A INMATE TELEPHONE REBATE FUND.

The department is authorized to establish and maintain an

inmate telephone rebate fund in each institution for the

deposit of moneys received for inmate telephone rebatescalls.

All funds deposited in this fund shall be used for the benefit

of inmates. The director shall adopt rules providing for the

disbursement of moneys from the fund.

Sec. 58. Section 904.513, subsection 1, paragraph b, subparagraph (4), Code 2003, is amended to read as follows:

(4) Assignment may also be made on the basis of the

offender's treatment program performance, as a disciplinary

measure, for medical needs, and for space availability at

community residential facilities. If there is insufficient

space at a community residential facility, the court may order

an offender to be released to the supervision of the judicial

district department of correctional services,or held in jail,

or committed to the custody of the director of the department

of corrections for assignment to an appropriate correctional

facility until there is sufficient space at a community

residential facility.

Sec. 59. Section 904.702, unnumbered paragraph 1, Code 2003, is amended to read as follows:

If allowances are paid pursuant to section 904.701, the

director shall establish an inmate account, for deposit of

those allowances and for deposit of moneys sent to the inmate

from a source other than the department of corrections. The

director may deduct an amount, not to exceed ten percent of

the amount of the allowance, unless the inmate requests a

larger amount, to be deposited into the inmate savings fund as

required under section 904.508, subsection 2. In addition to

deducting a portion of the allowance, the director may also

deduct from an inmate account any amount, except amounts

directed to be deposited in the inmate telephone fund

established in section 904.508A, sent to the inmate from a

source other than the department of corrections for deposit in

the inmate savings fund as required under section 904.508,

subsection 2, until the amount in the fund equals the amount

due the inmate upon discharge, parole, or placement on work

release. The director shall deduct from the inmate account an

amount established by the inmate's restitution plan of

payment. The director shall also deduct from any remaining

account balance an amount sufficient to pay all or part of any

judgment against the inmate, including but not limited to

judgments for taxes and child support, and court costs and

fees assessed either as a result of the inmate's confinement

or amounts required to be paid under section 610A.1. Written

notice of the amount of the deduction shall be given to the

inmate, who shall have five days after receipt of the notice

to submit in writing any and all objections to the deduction

to the director, who shall consider the objections prior to

transmitting the deducted amount to the clerk of the district

court. The director need give only one notice for each action

or appeal under section 610A.1 for which periodic deductions

are to be made. The director shall next deduct from any

remaining account balance an amount sufficient to pay all or

part of any costs assessed against the inmate for misconduct

or damage to the property of others. The director may deduct

from the inmate's account an amount sufficient to pay for the

inmate's share of the costs of health services requested by

the inmate and for the treatment of injuries inflicted by the

inmate on the inmate or others. The director may deduct and

disburse an amount sufficient for industries' programs to

qualify under the eligibility requirements established in the

Justice Assistance Act of 1984, Pub. L. No. 98-473, including

an amount to pay all or part of the cost of the inmate's

incarceration. The director may pay all or any part of

remaining allowances paid pursuant to section 904.701 directly

to a dependent of the inmate, or may deposit the allowance to

the account of the inmate, or may deposit a portion and allow

the inmate a portion for the inmate's personal use.

Sec. 60. Section 907.4, Code 2003, is amended to read as follows:

907.4 DEFERRED JUDGMENT DOCKET.

A deferment of judgment under section 907.3 shall be

reported promptly by the clerk of the district court, or the

clerk's designee, to the state court administrator for entry

in the deferred judgment docket. The docket shall contain a

permanent record of the deferred judgment including the name

and date of birth of the defendant, the district court docket

number, the nature of the offense, and the date of the

deferred judgment. Before granting deferred judgment in any

case, the court shall request of the state court administrator

a search of the deferred judgment docket and shall consider

any prior record of a deferred judgment against the defendant.

The permanent record provided for in this section is a

confidential record exempted from public access under section

22.7 and shall be available only to justices of the supreme

court, judges of the court of appeals, district judges,

district associate judges, judicial magistrates, clerks of the

district court, judicial district departments of correctional

services, and county attorneys requesting information pursuant

to this section, or the designee of a justice, judge,

magistrate, clerk, judicial district department of

correctional services, or county attorney.

Sec. 61. Section 907.9, subsections 1, 2, and 4, Code 2003, are amended to read as follows:

1. At any time that the court determines that the purposes

of probation have been fulfilled and the fees imposed under

section 905.14 have been paid to or waived by the judicial

district department of correctional servicesor on condition

that unpaid supervision fees be paid, the court may order the

discharge of a person from probation.

2. At any time that a probation officer determines that

the purposes of probation have been fulfilled and the fees

imposed under section 905.14 have been paid to or waived by

the judicial district department of correctional servicesor

on condition that unpaid supervision fees be paid, the officer

may order the discharge of a person from probation after

approval of the district director and notification of the

sentencing court and the county attorney who prosecuted the

case.

4. At the expiration of the period of probation and if the

fees imposed under section 905.14 have been paid to or waived

by the judicial district department of correctional services

or on condition that unpaid supervision fees be paid, the

court shall order the discharge of the person from probation,

and the court shall forward to the governor a recommendation

for or against restoration of citizenship rights to that

person. A person who has been discharged from probation shall

no longer be held to answer for the person's offense. Upon

discharge from probation, if judgment has been deferred under

section 907.3, the court's criminal record with reference to

the deferred judgment shall be expunged. The record

maintained by the state court administrator as required by

section 907.4 shall not be expunged. The court's record shall

not be expunged in any other circumstances.

Sec. 62. NEW SECTION 907B.4 INTERSTATE COMPACT FEE.

The department of corrections may assess a fee, not to

exceed one hundred dollars, for an application to transfer out

of the state under the interstate compact for adult offender

supervision. The fee may be waived by the department. The

moneys collected pursuant to this section shall be deposited

into the interstate compact fund established in section

904.117 and shall be used to offset the costs of complying

with the interstate compact for adult offender supervision.

Sec. 63. Section 910.3B, Code 2003, is amended to read as follows:

910.3B RESTITUTION FOR DEATH OF VICTIM.

1. In all criminal cases in which the offender is

convicted of a felony in which the act or acts committed by

the offender caused the death of another person, in addition

to the amount determined to be payable and ordered to be paid

to a victim for pecuniary damages, as defined under section

910.1, and determined under section 910.3, the court shall

also order the offender to pay at least one hundred fifty

thousand dollars in restitution to the victim's estate if the

victim died testate. If the victim died intestate the court

shall order the offender to pay the restitution to the

victim's heirs at law as determined pursuant to section

633.210. The obligation to pay the additional amount shall

not be dischargeable in any proceeding under the federal

Bankruptcy Act. Payment of the additional amount shall have

the same priority as payment of a victim's pecuniary damages

under section 910.2, in the offender's plan for restitution.

2. An award under this section does not preclude or

supersede the right of a victim's estate or heirs at law to

bring a civil action against the offender for damages arising

out of the same facts or event. However, no evidence relating

to the entry of the judgment against the offender pursuant to

this section or the amount of the award ordered pursuant to

this section shall be permitted to be introduced in any civil

action for damages arising out of the same facts or event.

3. An offender who is ordered to pay a victim's estate or

heirs at law under this section is precluded from denying the

elements of the felony offense which resulted in the order for

payment in any subsequent civil action for damages arising out

of the same facts or event.

Sec. 64. Section 915.100, subsection 2, paragraph c, Code 2003, is amended to read as follows:

c. In cases where the act committed by an offender causes

the death of another person, in addition to the amount ordered

for payment of the victim's pecuniary damages, the court shall

also order the offender to pay at least one hundred fifty

thousand dollars in restitution to the victim's estate or

heirs at law, pursuant to the provisions of section 910.3B.

Sec. 65.

MARKETING APPROPRIATION.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the department of economic

development, for the fiscal period beginning July 1, 2003, and

ending June 30, 2006, the following amounts, or so much

thereof as is necessary, to be used for the purpose

designated:

For implementing and administering the marketing strategy

approved under section 15G.108, if enacted by 2003 Iowa Acts,

House File 692 or another Act:

FY 2003-2004..................................... $ 2,500,000

FY 2004-2005..................................... $ 7,500,000

FY 2005-2006..................................... $ 10,000,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

Sec. 66.

DEPARTMENT OF ECONOMIC DEVELOPMENT APPROPRIATION.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the department of economic

development for the fiscal period beginning July 1, 2003, and

ending June 30, 2007, the following amounts, or so much

thereof as is necessary, to be used for the purpose

designated:

For programs administered by the department of economic

development:

FY 2003-2004...................................... $ 45,000,000

FY 2004-2005...................................... $ 41,000,000

FY 2005-2006...................................... $ 44,000,000

FY 2006-2007...................................... $ 48,000,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

3. Each year that moneys are appropriated under this

section, the grow Iowa values board shall allocate a

percentage of the moneys for each of the following types of

activities:

a. Business start-ups.

b. Business expansion.

c. Business modernization.

d. Business attraction.

e. Business retention.

f. Marketing.

4. An applicant for moneys appropriated under this section

shall be required by the department to include in the

application a statement regarding the intended return on

investment. A recipient of moneys appropriated under this

section shall annually submit a statement to the department

regarding the progress achieved on the intended return on

investment stated in the application. The department, in

cooperation with the department of revenue and finance, shall

develop a method of identifying and tracking each new job

created through financial assistance from moneys appropriated

under this section.

5. The department may use moneys appropriated under this

section to procure technical assistance from either the public

or private sector, for information technology purposes, and

for rail, air, or river port transportation-related purposes.

The use of moneys appropriated for rail, air, or river port

transportation-related purposes must be directly related to an

economic development project and the moneys must be used to

leverage other financial assistance moneys.

6. Of the moneys appropriated under this section, the

department may use one-half of one percent for administrative

purposes.

7. The grow Iowa values board is required to approve or

deny applications for financial assistance from moneys

appropriated under this section.

Sec. 67.

UNIVERSITY AND COLLEGE FINANCIAL ASSISTANCE APPROPRIATION.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the grow Iowa values board

for the fiscal period beginning July 1, 2003, and ending June

30, 2007, the following amounts, or so much thereof as is

necessary, to be used for the purposes designated:

For financial assistance for institutions of higher

learning under the control of the state board of regents and

for accredited private institutions as defined in section

261.9 for multiuse, goods manufacturing processes approved by

the food and drug administration of the United States

department of health and human services, protein purification

facilities for plant, animal, and chemical manufactured

proteins; accelerating new business creation; innovation

accelerators and business parks; incubator facilities;

upgrading food and drug administration drug approval

laboratories in Iowa City to a larger multiclient, goods

manufacturing processes facility; crop and animal livestock

facilities for the growing of transgenic crops and livestock,

protein extraction facilities, containment facilities, and

bioanalytical, biochemical, chemical, and microbiological

support facilities; a national center for food safety and

security; and advanced laboratory space:

FY 2003-2004...................................... $ 6,000,000

FY 2004-2005...................................... $ 7,000,000

FY 2005-2006...................................... $ 7,000,000

FY 2006-2007...................................... $ 7,000,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

3. In the distribution of moneys appropriated pursuant to

this section, the grow Iowa values board shall examine the

potential for using moneys appropriated pursuant to this

section to leverage other moneys for financial assistance to

accredited private institutions.

4. In awarding moneys appropriated pursuant to this

section, the grow Iowa values board shall consider whether the

purchase of suitable existing infrastructure is more cost-

efficient than building new infrastructure.

5. An institution of higher learning under the control of

the state board of regents may apply to use financial

assistance moneys under this section for purposes of a public

and private joint venture to acquire infrastructure assets or

research facilities or to leverage moneys in a manner

consistent with meeting the goals and performance measures

provided in section 15G.106, if enacted by 2003 Iowa Acts,

House File 692 or another Act.

6. Of the moneys appropriated under this section and

provided applications are submitted meeting the requirements

of the grow Iowa values board, not less than $10,000,000 in

financial assistance shall be awarded to the university of

Iowa, not less than $10,000,000 in financial assistance shall

be awarded to Iowa state university of science and technology,

and not less than $5,000,000 in financial assistance shall be

awarded to the university of northern Iowa.

Sec. 68.

REHABILITATION PROJECT TAX CREDITS APPROPRIATION.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the general fund of the

state, for the fiscal period beginning July 1, 2005, and

ending June 30, 2007, the following amounts, or so much

thereof as is necessary, to be used for the purpose

designated:

For payment of tax credits approved pursuant to section

404A.4 for projects located in certified cultural and

entertainment districts:

FY 2005-2006...................................... $ 500,000

FY 2006-2007...................................... $ 500,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

Sec. 69.

LOAN AND CREDIT GUARANTEE FUND APPROPRIATION.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the department of economic

development for the fiscal period beginning July 1, 2003, and

ending June 30, 2007, the following amounts, or so much

thereof as is necessary, to be used for the purpose

designated:

For deposit in the loan and credit guarantee fund created

in section 15E.227:

FY 2003-2004...................................... $ 2,500,000

FY 2004-2005...................................... $ 5,000,000

FY 2005-2006...................................... $ 7,500,000

FY 2006-2007...................................... $ 7,500,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purpose during the succeeding fiscal year.

Sec. 70.

ENDOW IOWA TAX CREDITS.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the general fund of the

state, for the fiscal period beginning July 1, 2004, and

ending June 30, 2007, the following amounts, or so much

thereof as is necessary, to be used for the purpose

designated:

For payment of endow Iowa tax credits authorized pursuant

to section 15E.305:

FY 2004-2005...................................... $ 250,000

FY 2005-2006...................................... $ 250,000

FY 2006-2007...................................... $ 500,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

Sec. 71.

ENDOW IOWA GRANTS APPROPRIATION.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the department of economic

development for the fiscal period beginning July 1, 2004, and

ending June 30, 2007, the following amounts, or so much

thereof as is necessary, to be used for the purpose

designated:

For endow Iowa grants to lead philanthropic entities

pursuant to section 15E.304:

FY 2004-2005...................................... $ 250,000

FY 2005-2006...................................... $ 250,000

FY 2006-2007...................................... $ 500,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

Sec. 72.

STATE PARKS AND DESTINATION PARKS APPROPRIATION.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the grow Iowa values board

for the fiscal period beginning July 1, 2003, and ending June

30, 2007, the following amount, or so much thereof as is

necessary, to be used for the purpose designated:

For the purpose of providing financial assistance for

projects in targeted state parks and destination parks:

FY 2003-2004...................................... $ 500,000

FY 2004-2005...................................... $ 0

FY 2005-2006...................................... $ 0

FY 2006-2007...................................... $ 500,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

3. The department of natural resources, in cooperation

with the department of economic development, shall submit a

plan to the grow Iowa values board for the expenditure of

moneys appropriated under this section. The plan shall focus

on improving state parks and destination parks for economic

development purposes. Based on the report submitted, the grow

Iowa values board shall provide financial assistance to the

department of natural resources for support of state parks and

destination parks.

Sec. 73.

IOWA CULTURAL TRUST FUND APPROPRIATION.

1. There is appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act, to the office of the treasurer

of state, for the fiscal period beginning July 1, 2003, and

ending June 30, 2007, the following amount, or so much thereof

as is necessary, to be used for the purpose designated:

For deposit in the Iowa cultural trust fund created in

section 303A.4:

FY 2003-2004...................................... $ 500,000

FY 2004-2005...................................... $ 0

FY 2005-2006...................................... $ 0

FY 2006-2007...................................... $ 500,000

2. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

Sec. 74.

ANTICIPATED FEDERAL MONEYS — APPROPRIATION.

1. There is appropriated from the fund created by section

8.41, for the fiscal period beginning July 1, 2003, and ending

June 30, 2005, the following amounts to be used for the

purpose designated:

For deposit in the grow Iowa values fund created in section

15G.107, if enacted by 2003 Iowa Acts, House File 692 or

another Act:

FY 2003-2004...................................... $ 59,000,000

FY 2004-2005...................................... $ 41,000,000

2. Moneys appropriated in this section are moneys

anticipated to be received from the federal government for

state and local government fiscal relief under the federal

Jobs and Growth Tax Relief Reconciliation Act of 2003 and

shall be expended as provided in the federal law making the

moneys available and in conformance with chapter 17A.

3. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

Sec. 75.

STREAMLINED SALES AND USE TAX REVENUE — APPROPRIATION.

1. There is appropriated from the general fund of the

state from moneys credited to the general fund of the state as

a result of entering into the streamlined sales and use tax

agreement, for the fiscal period beginning July 1, 2003, and

ending June 30, 2010, the following amounts to be used for the

purpose designated:

For deposit in the grow Iowa values fund created in section

15G.107, if enacted by 2003 Iowa Acts, House File 692 or

another Act:

FY 2003-2004...................................... $ 5,000,000

FY 2004-2005...................................... $ 23,000,000

FY 2005-2006...................................... $ 75,000,000

FY 2006-2007...................................... $ 75,000,000

FY 2007-2008...................................... $ 75,000,000

FY 2008-2009...................................... $ 75,000,000

FY 2009-2010...................................... $ 75,000,000

2. For purposes of this section, "moneys credited to the

general fund of the state as a result of entering into the

streamlined sales and use tax agreement" means the amount of

sales and use tax receipts credited to the general fund of the

state during a fiscal year that exceeds by two percent or more

the total sales and use tax receipts credited to the general

fund of the state during the previous fiscal year.

a. If the moneys credited to the general fund of the state

as a result of entering into the streamlined sales and use tax

agreement during a fiscal year total less than the amount

appropriated in this section, the appropriation in this

section shall be reduced to equal the total amount of the

moneys so credited.

b. If the appropriation for a fiscal year is reduced

pursuant to paragraph "a", all appropriations made from the

grow Iowa values fund for the same fiscal year shall be

reduced proportionately to the amount reduced due to paragraph

"a".

3. Notwithstanding section 8.33, moneys that remain

unexpended at the end of a fiscal year shall not revert to any

fund but shall remain available for expenditure for the

designated purposes during the succeeding fiscal year.

Sec. 76. NEW SECTION 260C.18A WORKFORCE TRAINING AND ECONOMIC DEVELOPMENT FUNDS.

1.

a. A workforce training and economic development fund

is created for each community college. Moneys shall be

deposited and expended from a fund as provided under this

section.

b. Moneys in the funds shall consist of any moneys

appropriated by the general assembly and any other moneys

available to and obtained or accepted by the department of

economic development from federal sources or private sources

for placement in the funds. Notwithstanding section 8.33,

moneys in the funds at the end of each fiscal year shall not

revert to any other fund but shall remain in the funds for

expenditure in subsequent fiscal years.

2. On July 1 of each year for the fiscal year beginning

July 1, 2003, and for every fiscal year thereafter, moneys

from the grow Iowa values fund created in section 15G.107, if

enacted by 2003 Iowa Acts, House File 692 or another Act, are

appropriated to the department of economic development for

deposit in the workforce training and economic development

funds in amounts determined pursuant to subsection 3. Moneys

deposited in the funds and disbursed to community colleges for

a fiscal year shall be expended for the following purposes,

provided seventy percent of the moneys shall be used on

projects in the areas of advanced manufacturing, information

technology and insurance, and life sciences which include the

areas of biotechnology, health care technology, and nursing

care technology:

a. Projects in which an agreement between a community

college and an employer located within the community college's

merged area meet all of the requirements of the accelerated

career education program under chapter 260G.

b. Projects in which an agreement between a community

college and a business meet all the requirements of the Iowa

jobs training Act under chapter 260F.

c. For the development and implementation of career

academies designed to provide new career preparation

opportunities for high school students that are formally

linked with postsecondary career and technical education

programs. For purposes of this section, "career academy"

means a program of study that combines a minimum of two years

of secondary education with an associate degree, or the

equivalent, career preparatory program in a nonduplicative,

sequential course of study that is standards based, integrates

academic and technical instruction, utilizes work-based and

worksite learning where appropriate and available, utilizes an

individual career planning process with parent involvement,

and leads to an associate degree or postsecondary diploma or

certificate in a career field that prepares an individual for

entry and advancement in a high-skill and reward career field

and further education. The department of economic

development, in conjunction with the state board of education

and the division of community colleges and workforce

preparation of the department of education, shall adopt

administrative rules for the development and implementation of

such career academies pursuant to section 256.11, subsection

5, paragraph "h", section 260C.1, and Title II of Pub. L. No.

105-332, Carl D. Perkins Vocational and Technical Education

Act of 1998.

d. Programs and courses that provide vocational and

technical training, and programs for in-service training and

retraining under section 260C.1, subsections 2 and 3.

e. Job retention projects under section 260F.9.

3. Of the moneys appropriated in this section, for the

fiscal period beginning July 1, 2003, and ending June 30,

2006, the following amounts shall be designated for the

purposes of funding job retention projects under section

260F.9:

a. One million dollars for the fiscal year beginning July

1, 2003.

b. One million dollars for the fiscal year beginning July

1, 2004.

c. One million dollars for the fiscal year beginning July

1, 2005.

4. The maximum cumulative total amount of moneys that may

be deposited in all the workforce training and economic

development funds for distribution to community colleges in a

fiscal year shall be determined as follows:

a. Five million dollars for the fiscal year beginning July

1, 2003.

b. Five million dollars for the fiscal year beginning July

1, 2004.

c. Five million dollars for the fiscal year beginning July

1, 2005.

d. Ten million dollars for the fiscal year beginning July

1, 2006.

e. For the fiscal year beginning July 1, 2007, and each

succeeding fiscal year, the grow Iowa values board shall make

a determination if sufficient moneys exist in the grow Iowa

values fund to distribute to community colleges.

5. The department of economic development shall allocate

the moneys appropriated pursuant to this section to the

community college workforce training and economic development

funds utilizing the same distribution formula used for the

allocation of state general aid to the community colleges.

6. Each community college shall do all of the following:

a. Adopt a two-year workforce training and economic

development fund plan outlining the community college's

proposed use of moneys appropriated under subsection 2.

b. Update the two-year plan annually.

c. Prepare an annual progress report on the two-year

plan's implementation.

d. Annually submit the two-year plan and progress report

to the department of economic development in a manner

prescribed by rules adopted by the department pursuant to

chapter 17A and annually file a copy of the plan and progress

report with the grow Iowa values board. For the fiscal year

beginning July 1, 2004, and each fiscal year thereafter, a

community college shall not have moneys deposited in the

workforce training and economic development fund of that

community college unless the grow Iowa values board approves

the annual progress report of the community college.

7. Any individual project using over one million dollars

of moneys from a workforce training and economic development

fund shall require prior approval from the grow Iowa values

board.

Sec. 77. NEW SECTION 260F.9 JOB RETENTION PROGRAM.

1. The department of economic development shall administer

the job retention program. The department shall adopt rules

pursuant to chapter 17A necessary for the administration of

this section. By January 15 of each year, the department

shall submit a written report to the general assembly and the

governor regarding the activities of the job retention program

during the previous calendar year.

2. A community college and the department may enter into

an agreement to establish a job retention project. A job

retention project agreement shall include, but not be limited

to, the following:

a. The date of the agreement.

b. The anticipated number of employees to be trained.

c. The estimated cost of training.

d. A statement regarding the number of employees employed

by the participating business on the date of the agreement

which must equal at least the lesser of one thousand employees

or four percent or more of the county's resident labor force

based on the most recent annual labor force statistics from

the department of workforce development.

e. A commitment that the participating business shall

invest at least fifteen million dollars to retool the

workplace and upgrade the facilities of the participating

business.

f. A commitment that the participating business shall not

move the business operation out of this state or close the

business operation for at least ten years following the date

of the agreement.

g. Other criteria established by the department of

economic development.

3. A job retention project agreement entered into pursuant

to this section must be approved by the board of trustees of

the applicable community college, the department of economic

development, and the participating business.

Sec. 78. NEW SECTION 260F.101 REPORTING.

A community college entering into an agreement pursuant to

this chapter shall submit an annual written report by the end

of each calendar year with the grow Iowa values board created

in section 15G.102, if enacted by 2003 Iowa Acts, House File

692 or another Act. The report shall provide information

regarding how the agreement affects the achievement of the

goals and performance measures provided in section 15G.106, if

enacted by 2003 Iowa Acts, House File 692 or another Act.

Sec. 79. Section 260G.3, subsection 2, Code 2003, is amended to read as follows:

2. An agreement may include reasonable and necessary

provisions to implement the accelerated career education

program. If an agreement that utilizes program job credits is

entered into, the community college and the employer shall

notify the department of revenue and finance as soon as

possible. The community college shall also file a copy of the

agreement with the department of economic development as

required in section 260G.4B. The agreement shall provide for

program costs, including deferred costs, which may be paid

from any of the following sources:

a. Program job credits which the employer receives based

on the number of program job positions agreed to by the

employer to be available under the agreement.

b. Cash or in-kind contributions by the employer toward

the program cost. At a minimum, the employer contribution

shall be twenty percent of the program costs.

c. Tuition, student fees, or special charges fixed by the

board of directors to defray program costs.

d. Guarantee by the employer of payments to be received

under paragraphs "a" and "b".

e. Moneys from a workforce training and economic

development fund created in section 260C.18A, based on the

number of program job positions agreed to by the employer to

be available under the agreement, the amount of which shall be

calculated in the same manner as the program job credits

provided for in section 260G.4A.

Sec. 80. NEW SECTION 260G.101 REPORTING.

A community college entering into an agreement pursuant to

this chapter shall submit an annual written report by the end

of each calendar year with the grow Iowa values board created

in section 15G.102, if enacted by 2003 Iowa Acts, House File

692 or another Act. The report shall provide information

regarding how the agreement affects the achievement of the

goals and performance measures provided in section 15G.106, if

enacted by 2003 Iowa Acts, House File 692 or another Act.

Sec. 81. NEW SECTION 15E.227 LOAN AND CREDIT GUARANTEE FUND.

1. A loan and credit guarantee fund is created and

established as a separate and distinct fund in the state

treasury. Moneys in the fund shall only be used for purposes

provided in this section. The moneys in the fund are

appropriated to the department to be used for all of the

following purposes:

a. Payment of claims pursuant to loan and credit guarantee

agreements entered into under this division.

b. Payment of administrative costs of the department for

actual and necessary administrative expenses incurred by the

department in administering the program.

c. Purchase or buyout of superior or prior liens,

mortgages, or security interests.

d. Purchase of insurance to cover the default of loans

made pursuant to the requirements of the loan and credit

guarantee program.

2. Moneys in the loan and credit guarantee fund shall

consist of all of the following:

a. Moneys appropriated by the general assembly for that

purpose and any other moneys available to and obtained or

accepted by the department for placement in the fund.

b. Proceeds from collateral assigned to the department,

fees for guarantees, gifts, and moneys from any grant made to

the fund by any federal agency.

c. Moneys appropriated from the grow Iowa values fund

created in section 15G.107, if enacted by 2003 Iowa Acts,

House File 692 or another Act.

3. Moneys in the fund are not subject to section 8.33.

Notwithstanding section 12C.7, interest or earnings on the

moneys in the fund shall be credited to the fund.

4.

a. The department shall only pledge moneys in the loan

and credit guarantee fund and not any other moneys of the

department. In a fiscal year, the department may pledge an

amount not to exceed the total amount appropriated to the fund

for the same fiscal year to assure the repayment of loan and

credit guarantees or other extensions of credit made to or on

behalf of qualified businesses or targeted industry businesses

for eligible project costs.

b. The department shall not pledge the credit or taxing

power of this state or any political subdivision of this state

or make debts payable out of any moneys except for those in

the loan and credit guarantee fund.

Sec. 82. NEW SECTION 262B.12 APPROPRIATION.

On July 1 of each year there is appropriated from the

general fund of the state to each university under the control

of the state board of regents, an amount equal to the amount

determined by the department of economic development pursuant

to section 262B.11, subsection 4, paragraph "c", subparagraph

(2), if enacted by 2003 Iowa Acts, House File 692 or another

Act.

Sec. 83. NEW SECTION 15E.305 ENDOW IOWA TAX CREDIT.

1. For tax years beginning on or after January 1, 2003, a

tax credit shall be allowed against the taxes imposed in

chapter 422, divisions II, III, and V, and in chapter 432, and

against the moneys and credits tax imposed in section 533.24

equal to twenty percent of a taxpayer's endowment gift to a

qualified community foundation. An individual may claim a tax

credit under this section of a partnership, limited liability

company, S corporation, estate, or trust electing to have

income taxed directly to the individual. The amount claimed

by the individual shall be based upon the pro rata share of

the individual's earnings from the partnership, limited

liability company, S corporation, estate, or trust. A tax

credit shall be allowed only for an endowment gift made to a

qualified community foundation for a permanent endowment fund

established to benefit a charitable cause in this state. Any

tax credit in excess of the taxpayer's tax liability for the

tax year may be credited to the tax liability for the

following five years or until depleted, whichever occurs

first. A tax credit shall not be carried back to a tax year

prior to the tax year in which the taxpayer claims the tax

credit.

2. The aggregate amount of tax credits authorized pursuant

to this section shall not exceed a total of two million

dollars. The maximum amount of tax credits granted to a

taxpayer shall not exceed five percent of the aggregate amount

of tax credits authorized.

3. A tax credit shall not be transferable to any other

taxpayer.

4. A tax credit shall not be authorized pursuant to this

section after December 31, 2005.

5. The department shall develop a system for registration

and authorization of tax credits under this section and shall

control the distribution of all tax credits to taxpayers

providing an endowment gift subject to this section. The

department shall adopt administrative rules pursuant to

chapter 17A for the qualification and administration of

endowment gifts.

Sec. 84. NEW SECTION 422.11H ENDOW IOWA TAX CREDIT.

The tax imposed under this division, less the credits

allowed under sections 422.12 and 422.12B, shall be reduced by

an endow Iowa tax credit authorized pursuant to section

15E.305.

Sec. 85. Section 422.33, Code 2003, is amended by adding the following new subsection:

NEW SUBSECTION 14. The taxes imposed under this division

shall be reduced by an endow Iowa tax credit authorized

pursuant to section 15E.305.

Sec. 86. Section 422.60, Code 2003, is amended by adding the following new subsection:

NEW SUBSECTION 7. The taxes imposed under this division

shall be reduced by an endow Iowa tax credit authorized

pursuant to section 15E.305.

Sec. 87. NEW SECTION 432.12D ENDOW IOWA TAX CREDIT.

The tax imposed under this chapter shall be reduced by an

endow Iowa tax credit authorized pursuant to section 15E.305.

Sec. 88. Section 533.24, Code 2003, is amended by adding the following new unnumbered paragraph:

NEW UNNUMBERED PARAGRAPH. The moneys and credits tax

imposed under this section shall be reduced by an endow Iowa

tax credit authorized pursuant to section 15E.305.

Sec. 89.

EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.

This division of this Act, being deemed of immediate

importance, takes effect upon enactment and is retroactively

applicable to January 1, 2003, for tax years beginning on or

after that date.

Sec. 90. Section 404A.4, subsection 4, Code 2003, is amended to read as follows:

4. The total amount of tax credits that may be approved

for a fiscal year under this chapter shall not exceed two

million four hundred thousand dollars. For the fiscal years

beginning July 1, 2005, and July 1, 2006, an additional five

hundred thousand dollars of tax credits may be approved each

fiscal year for purposes of projects located in cultural and

entertainment districts certified pursuant to section 303.3B,

if enacted by 2003 Iowa Acts, House File 692 or another Act.

Any of the additional tax credits allocated for projects

located in certified cultural and entertainment districts that

are not approved during a fiscal year may be carried over to

the succeeding fiscal year. Tax credit certificates shall be

issued on the basis of the earliest awarding of certifications

of completion as provided in subsection 1. The departments of

economic development and revenue and finance shall each adopt

rules to jointly administer this subsection and shall provide

by rule for the method to be used to determine for which

fiscal year the tax credits are approved.

Sec. 91. Section 8.57, subsection 5, Code 2003, is amended by adding the following new paragraph:

NEW PARAGRAPH f. There is appropriated from the rebuild

Iowa infrastructure fund to the secure an advanced vision for

education fund created in section 422E.3A, for each fiscal

year of the fiscal period beginning July 1, 2004, and ending

June 30, 2014, the amount of the moneys in excess of the first

forty-seven million dollars credited to the rebuild Iowa

infrastructure fund during the fiscal year, not to exceed ten

million dollars.

Sec. 92. NEW SECTION 292A.3A APPROPRIATION.

There is appropriated from the general fund of the state

from moneys credited to the general fund of the state as a

result of the state entering into the streamlined sales and

use tax agreement to the secure an advanced vision for

education fund created in section 422E.3A, the sum of five

million dollars for each fiscal year of the fiscal period

beginning July 1, 2004, and ending June 30, 2014. The

appropriation in this section shall be made after the

appropriation from the same source to the grow Iowa fund

created in 2003 Iowa Acts, House File 692 or another Act. For

purposes of this section, "moneys credited to the general fund

of the state as a result of entering into the streamlined

sales and use tax agreement" means the amount of sales and use

tax receipts credited to the general fund of the state during

a fiscal year that exceeds by two percent or more the total

sales and use tax receipts credited to the general fund of the

state during the previous fiscal year.

Sec. 93.

The divisions of this Act designated economic

development appropriations, workforce-related issues, loan and

credit guarantee fund, university-based research utilization

program appropriation, endow Iowa tax credit, and

rehabilitation project tax credits are repealed effective June

30, 2010.

Sec. 94. NEW SECTION 423.1 DEFINITIONS.

As used in this chapter the following words, terms, and

phrases have the meanings ascribed to them by this section,

except where the context clearly indicates that a different

meaning is intended:

1. "Agent" means a person appointed by a seller to

represent the seller before the member states.

2. "Agreement" means the streamlined sales and use tax

agreement authorized by subchapter IV of this chapter to

provide a mechanism for establishing and maintaining a

cooperative, simplified system for the application and

administration of sales and use taxes.

3. "Agricultural production" includes the production of

flowering, ornamental, or vegetable plants in commercial

greenhouses or otherwise, and production from aquaculture.

"Agricultural products" includes flowering, ornamental, or

vegetable plants and those products of aquaculture.

4. "Business" includes any activity engaged in by any

person or caused to be engaged in by the person with the

object of gain, benefit, or advantage, either direct or

indirect.

5. "Certificate of title" means a certificate of title

issued for a vehicle or for manufactured housing under chapter

321.

6. "Certified automated system" means software certified

under the agreement to calculate the tax imposed by each

jurisdiction on a transaction, determine the amount of tax to

remit to the appropriate state, and maintain a record of the

transaction.

7. "Certified service provider" means an agent certified

under the agreement to perform all of a seller's sales or use

tax functions, other than the seller's obligation to remit tax

on its own purchases.

8. "Computer" means an electronic device that accepts

information in digital or similar form and manipulates the

information for a result based on a sequence of instructions.

9. "Computer software" means a set of coded instructions

designed to cause a computer or automatic data processing

equipment to perform a task.

10. "Delivered electronically" means delivered to the

purchaser by means other than tangible storage media.

11. "Delivery charges" means charges assessed by a seller

of personal property or services for preparation and delivery

to a location designated by the purchaser of personal property

or services including, but not limited to, transportation,

shipping, postage, handling, crating, and packing charges.

12. "Department" means the department of revenue and

finance.

13. "Direct mail" means printed material delivered or

distributed by United States mail or other delivery service to

a mass audience or to addressees on a mailing list provided by

the purchaser or at the direction of the purchaser when the

cost of the items is not billed directly to the recipients.

"Direct mail" includes tangible personal property supplied

directly or indirectly by the purchaser to the direct mail

seller for inclusion in the package containing the printed

material. "Direct mail" does not include multiple items of

printed material delivered to a single address.

14. "Director" means the director of revenue and finance.

15. "Electronic" means relating to technology having

electrical, digital, magnetic, wireless, optical,

electromagnetic, or similar capabilities.

16. "Farm deer" means the same as defined in section

189A.2.

17. "Farm machinery and equipment" means machinery and

equipment used in agricultural production.

18. "First use of a service". A "first use of a service"

occurs, for the purposes of this chapter, when a service is

rendered, furnished, or performed in Iowa or if rendered,

furnished, or performed outside of Iowa, when the product or

result of the service is used in Iowa.

19. "Goods, wares, or merchandise" means the same as

tangible personal property.

20. "Governing board" means the group comprised of

representatives of the member states of the agreement which is

created by the agreement to be responsible for the agreement's

administration and operation.

21. "Installed purchase price" is the amount charged,

valued in money whether paid in money or otherwise, by a

building contractor to convert manufactured housing from

tangible personal property into realty. "Installed purchase

price" includes, but is not limited to, amounts charged for

installing a foundation and electrical and plumbing hookups.

"Installed purchase price" excludes any amount charged for

landscaping in connection with the conversion.

22. "Lease or rental".

a. "Lease or rental" means any transfer of possession or

control of tangible personal property for a fixed or

indeterminate term for consideration. A "lease or rental" may

include future options to purchase or extend.

b. "Lease or rental" includes agreements covering motor

vehicles and trailers when the amount of consideration may be

increased or decreased by reference to the amount realized

upon sale or disposition of the property as defined in 26

U.S.C. § 7701(h)(1).

c. "Lease or rental" does not include any of the

following:

(1) A transfer of possession or control of property under

a security agreement or deferred payment plan that requires

the transfer of title upon completion of the required

payments.

(2) A transfer of possession or control of property under

an agreement that requires the transfer of title upon

completion of required payments, and payment of any option

price does not exceed the greater of one hundred dollars or

one percent of the total required payments.

(3) Providing tangible personal property along with an

operator for a fixed or indeterminate period of time. A

condition of this exclusion is that the operator is necessary

for the equipment to perform as designed. For the purpose of

this subparagraph, an operator must do more than maintain,

inspect, or set up the tangible personal property.

d. This definition shall be used for sales and use tax

purposes regardless of whether a transaction is characterized

as a lease or rental under generally accepted accounting

principles, the Internal Revenue Code, the Uniform Commercial

Code, or other provisions of federal, state, or local law.

23. "Livestock" includes but is not limited to an animal

classified as an ostrich, rhea, emu, bison, or farm deer.

24. "Manufactured housing" means "manufactured home" as

defined in section 321.1.

25. "Member state" is any state which has signed the

agreement.

26. "Mobile home" means "manufactured or mobile home" as

defined in section 321.1.

27. "Model 1 seller" is a seller that has selected a

certified service provider as its agent to perform all the

seller's sales and use tax functions, other than the seller's

obligation to remit tax on its own purchases.

28. "Model 2 seller" is a seller that has selected a

certified automated system to perform part of its sales and

use tax functions, but retains responsibility for remitting

the tax.

29. "Model 3 seller" is a seller that has sales in at

least five member states, has total annual sales revenue of at

least five hundred million dollars, has a proprietary system

that calculates the amount of tax due each jurisdiction, and

has entered into a performance agreement with the member

states that establishes a tax performance standard for the

seller. As used in this definition, a "seller" includes an

affiliated group of sellers using the same proprietary system.

30. "Nonresidential commercial operations" means

industrial, commercial, mining, or agricultural operations,

whether for profit or not, but does not include apartment

complexes or mobile home parks.

31. "Not registered under the agreement" means lack of

registration by a seller with the member states under the

central registration system referenced in section 423.11,

subsection 4.

32. "Person" means an individual, trust, estate,

fiduciary, partnership, limited liability company, limited

liability partnership, corporation, or any other legal entity.

33. "Place of business" means any warehouse, store, place,

office, building, or structure where goods, wares, or

merchandise are offered for sale at retail or where any

taxable amusement is conducted, or each office where gas,

water, heat, communication, or electric services are offered

for sale at retail.

When a retailer or amusement operator sells merchandise by

means of vending machines or operates music or amusement

devices by coin-operated machines at more than one location

within the state, the office, building, or place where the

books, papers, and records of the taxpayer are kept shall be

deemed to be the taxpayer's place of business.

34. "Prewritten computer software" includes software

designed and developed by the author or other creator to the

specifications of a specific purchaser when it is sold to a

person other than the purchaser. The combining of two or more

prewritten computer software programs or prewritten portions

of prewritten programs does not cause the combination to be

other than prewritten computer software. "Prewritten computer

software" also means computer software, including prewritten

upgrades, which is not designed and developed by the author or

other creator to the specifications of a specific purchaser.

When a person modifies or enhances computer software of

which the person is not the author or creator, the person

shall be deemed to be the author or creator only of such

person's modifications or enhancements. Prewritten computer

software or a prewritten portion of the prewritten software

that is modified or enhanced to any degree, when such

modification or enhancement is designed and developed to the

specifications of a specific purchaser, remains prewritten

computer software. However, when there is a reasonable,

separately stated charge or an invoice or other statement of

the price given to the purchaser for such modification or

enhancement, such modification or enhancement shall not

constitute prewritten computer software.

35. "Property purchased for resale in connection with the

performance of a service" means property which is purchased

for resale in connection with the rendition, furnishing, or

performance of a service by a person who renders, furnishes,

or performs the service if all of the following occur:

a. The provider and user of the service intend that a sale

of the property will occur.

b. The property is transferred to the user of the service

in connection with the performance of the service in a form or

quantity capable of a fixed or definite price value.

c. The sale is evidenced by a separate charge for the

identifiable piece of property.

36. "Purchase" means any transfer, exchange, or barter,

conditional or otherwise, in any manner or by any means

whatsoever, for a consideration.

37. "Purchase price" means the same as "sales price" as

defined in this section.

38. "Purchaser" is a person to whom a sale of personal

property is made or to whom a service is furnished.

39. "Receive" and "receipt" mean any of the following:

a. Taking possession of tangible personal property.

b. Making first use of a service.

c. Taking possession or making first use of digital goods,

whichever comes first.

"Receive" and "receipt" do not include possession by a

shipping company on behalf of a purchaser.

40. "Registered under the agreement" means registration by

a seller under the central registration system referenced in

section 423.11, subsection 4.

41. "Relief agency" means the state, any county, city and

county, city, or district thereof, or any agency engaged in

actual relief work.

42. "Retailer" means and includes every person engaged in

the business of selling tangible personal property or taxable

services at retail, or the furnishing of gas, electricity,

water, or communication service, and tickets or admissions to

places of amusement and athletic events or operating amusement

devices or other forms of commercial amusement from which

revenues are derived. However, when in the opinion of the

director it is necessary for the efficient administration of

this chapter to regard any salespersons, representatives,

truckers, peddlers, or canvassers as agents of the dealers,

distributors, supervisors, employers, or persons under whom

they operate or from whom they obtain tangible personal

property sold by them irrespective of whether or not they are

making sales on their own behalf or on behalf of such dealers,

distributors, supervisors, employers, or persons, the director

may so regard them, and may regard such dealers, distributors,

supervisors, employers, or persons as retailers for the

purposes of this chapter. "Retailer" includes a seller

obligated to collect sales or use tax.

43. "Retailer maintaining a place of business in this

state" or any like term includes any retailer having or

maintaining within this state, directly or by a subsidiary, an

office, distribution house, sales house, warehouse, or other

place of business, or any representative operating within this

state under the authority of the retailer or its subsidiary,

irrespective of whether that place of business or

representative is located here permanently or temporarily, or

whether the retailer or subsidiary is admitted to do business

within this state pursuant to chapter 490.

44. "Retailers who are not model sellers" means all

retailers other than model 1, model 2, or model 3 sellers.

45. "Retail sale" or "sale at retail" means any sale,

lease, or rental for any purpose other than resale, sublease,

or subrent.

46. "Sales" or "sale" means any transfer, exchange, or

barter, conditional or otherwise, in any manner or by any

means whatsoever, for consideration.

47. "Sales price" applies to the measure subject to sales

tax.

a. "Sales price" means the total amount of consideration,

including cash, credit, property, and services, for which

personal property or services are sold, leased, or rented,

valued in money, whether received in money or otherwise,

without any deduction for any of the following:

(1) The seller's cost of the property sold.

(2) The cost of materials used, labor or service cost,

interest, losses, all costs of transportation to the seller,

all taxes imposed on the seller, and any other expenses of the

seller.

(3) Charges by the seller for any services necessary to

complete the sale, other than delivery and installation

charges.

(4) Delivery charges.

(5) Installation charges.

(6) The value of exempt personal property given to the

purchaser where taxable and exempt personal property have been

bundled together and sold by the seller as a single product or

piece of merchandise.

(7) Credit for any trade-in authorized by section 423.3,

subsection 58.

b. "Sales price" does not include:

(1) Discounts, including cash, term, or coupons that are

not reimbursed by a third party that are allowed by a seller

and taken by a purchaser on a sale.

(2) Interest, financing, and carrying charges from credit

extended on the sale of personal property or services, if the

amount is separately stated on the invoice, bill of sale, or

similar document given to the purchaser.

(3) Any taxes legally imposed directly on the consumer

that are separately stated on the invoice, bill of sale, or

similar document given to the purchaser.

(4) The amounts received for charges included in paragraph

"a", subparagraphs (3) through (7), if they are separately

contracted for and separately stated on the invoice, billing,

or similar document given to the purchaser.

48. "Sales tax" means the tax levied under subchapter II

of this chapter.

49. "Seller" means any person making sales, leases, or

rentals of personal property or services.

50. "Services" means all acts or services rendered,

furnished, or performed, other than services used in

processing of tangible personal property for use in retail

sales or services, for an employer, as defined in section

422.4, subsection 3, for a valuable consideration by any

person engaged in any business or occupation specifically

enumerated in section 423.2. The tax shall be due and

collectible when the service is rendered, furnished, or

performed for the ultimate user of the service.

51. "Services used in the processing of tangible personal

property" includes the reconditioning or repairing of tangible

personal property of the type normally sold in the regular

course of the retailer's business and which is held for sale.

52. "State" means any state of the United States and the

District of Columbia.

53. "System" means the central electronic registration

system maintained by Iowa and other states which are

signatories to the agreement.

54. "Tangible personal property" means personal property

that can be seen, weighed, measured, felt, or touched, or that

is in any other manner perceptible to the senses. "Tangible

personal property" includes electricity, water, gas, steam,

and prewritten computer software.

55. "Taxpayer" includes any person who is subject to a tax

imposed by this chapter, whether acting on the person's own

behalf or as a fiduciary.

56. "Trailer" shall mean every trailer, as is now or may

be hereafter so defined by chapter 321, which is required to

be registered or is subject only to the issuance of a

certificate of title under chapter 321.

57. "Use" means and includes the exercise by any person of

any right or power over tangible personal property incident to

the ownership of that property. A retailer's or building

contractor's sale of manufactured housing for use in this

state, whether in the form of tangible personal property or of

realty, is a use of that property for the purposes of this

chapter.

58. "Use tax" means the tax levied under subchapter III of

this chapter for which the retailer collects and remits tax to

the department.

59. "User" means the immediate recipient of the services

who is entitled to exercise a right of power over the product

of such services.

60. "Value of services" means the price to the user

exclusive of any direct tax imposed by the federal government

or by this chapter.

61. "Vehicles subject to registration" means any vehicle

subject to registration pursuant to section 321.18.

Sec. 95. NEW SECTION 423.2 TAX IMPOSED.

1. There is imposed a tax of five percent upon the sales

price of all sales of tangible personal property, consisting

of goods, wares, or merchandise, sold at retail in the state

to consumers or users except as otherwise provided in this

subchapter.

a. For the purposes of this subchapter, sales of the

following services are treated as if they were sales of

tangible personal property:

(1) Sales of engraving, photography, retouching, printing,

and binding services.

(2) Sales of vulcanizing, recapping, and retreading

services.

(3) Sales of prepaid telephone calling cards and prepaid

authorization numbers.

(4) Sales of optional service or warranty contracts,

except residential service contracts regulated under chapter

523C, which provide for the furnishing of labor and materials

and require the furnishing of any taxable service enumerated

under this section. The sales price is subject to tax even if

some of the services furnished are not enumerated under this

section. Additional sales, services, or use taxes shall not

be levied on services, parts, or labor provided under optional

service or warranty contracts which are subject to tax under

this subsection.

If the optional service or warranty contract is a computer

software maintenance or support service contract and there is

no separately stated fee for the taxable personal property or

for the nontaxable service, the tax imposed by this subsection

shall be imposed on fifty percent of the sales price from the

sale of such contract. If the contract provides for technical

support services only, no tax shall be imposed under this

subsection. The provisions of this subparagraph (4) also

apply to the use tax.

(5) Renting of rooms, apartments, or sleeping quarters in

a hotel, motel, inn, public lodging house, rooming house,

mobile home which is tangible personal property, or tourist

court, or in any place where sleeping accommodations are

furnished to transient guests for rent, whether with or

without meals. "Renting" and "rent" include any kind of

direct or indirect charge for such rooms, apartments, or

sleeping quarters, or their use. However, the tax does not

apply to the sales price from the renting of a room,

apartment, or sleeping quarters while rented by the same

person for a period of more than thirty-one consecutive days.

b. Sales of building materials, supplies, and equipment to

owners, contractors, subcontractors, or builders for the

erection of buildings or the alteration, repair, or

improvement of real property are retail sales of tangible

personal property in whatever quantity sold. Where the owner,

contractor, subcontractor, or builder is also a retailer

holding a retail sales tax permit and transacting retail sales

of building materials, supplies, and equipment, the person

shall purchase such items of tangible personal property

without liability for the tax if such property will be subject

to the tax at the time of resale or at the time it is

withdrawn from inventory for construction purposes. The sales

tax shall be due in the reporting period when the materials,

supplies, and equipment are withdrawn from inventory for

construction purposes or when sold at retail. The tax shall

not be due when materials are withdrawn from inventory for use

in construction outside of Iowa and the tax shall not apply to

tangible personal property purchased and consumed by the

manufacturer as building materials in the performance by the

manufacturer or its subcontractor of construction outside of

Iowa. The sale of carpeting is not a sale of building

materials. The sale of carpeting to owners, contractors,

subcontractors, or builders shall be treated as the sale of

ordinary tangible personal property and subject to the tax

imposed under this subsection and the use tax.

c. The use within this state of tangible personal property

by the manufacturer thereof, as building materials, supplies,

or equipment, in the performance of construction contracts in

Iowa, shall, for the purpose of this subchapter, be construed

as a sale at retail of tangible personal property by the

manufacturer who shall be deemed to be the consumer of such

tangible personal property. The tax shall be computed upon

the cost to the manufacturer of the fabrication or production

of the tangible personal property.

2. A tax of five percent is imposed upon the sales price

of the sale or furnishing of gas, electricity, water, heat,

pay television service, and communication service, including

the sales price from such sales by any municipal corporation

or joint water utility furnishing gas, electricity, water,

heat, pay television service, and communication service to the

public in its proprietary capacity, except as otherwise

provided in this subchapter, when sold at retail in the state

to consumers or users.

3. A tax of five percent is imposed upon the sales price

of all sales of tickets or admissions to places of amusement,

fairs, and athletic events except those of elementary and

secondary educational institutions. A tax of five percent is

imposed on the sales price of an entry fee or like charge

imposed solely for the privilege of participating in an

activity at a place of amusement, fair, or athletic event

unless the sales price of tickets or admissions charges for

observing the same activity are taxable under this subchapter.

A tax of five percent is imposed upon that part of private

club membership fees or charges paid for the privilege of

participating in any athletic sports provided club members.

4. A tax of five percent is imposed upon the sales price

derived from the operation of all forms of amusement devices

and games of skill, games of chance, raffles, and bingo games

as defined in chapter 99B, operated or conducted within the

state, the tax to be collected from the operator in the same

manner as for the collection of taxes upon the sales price of

tickets or admission as provided in this section. Nothing in

this subsection shall legalize any games of skill or chance or

slot-operated devices which are now prohibited by law.

The tax imposed under this subsection covers the total

amount from the operation of games of skill, games of chance,

raffles, and bingo games as defined in chapter 99B, and

musical devices, weighing machines, shooting galleries,

billiard and pool tables, bowling alleys, pinball machines,

slot-operated devices selling merchandise not subject to the

general sales taxes and on the total amount from devices or

systems where prizes are in any manner awarded to patrons and

upon the receipts from fees charged for participation in any

game or other form of amusement, and generally upon the sales

price from any source of amusement operated for profit, not

specified in this section, and upon the sales price from which

tax is not collected for tickets or admission, but tax shall

not be imposed upon any activity exempt from sales tax under

section 423.3, subsection 78. Every person receiving any

sales price from the sources described in this section is

subject to all provisions of this subchapter relating to

retail sales tax and other provisions of this chapter as

applicable.

5. There is imposed a tax of five percent upon the sales

price from the furnishing of services as defined in section

423.1.

6. The sales price of any of the following enumerated

services is subject to the tax imposed by subsection 5:

alteration and garment repair; armored car; vehicle repair;

battery, tire, and allied; investment counseling; service

charges of all financial institutions; barber and beauty; boat

repair; vehicle wash and wax; campgrounds; carpentry; roof,

shingle, and glass repair; dance schools and dance studios;

dating services; dry cleaning, pressing, dyeing, and

laundering; electrical and electronic repair and installation;

excavating and grading; farm implement repair of all kinds;

flying service; furniture, rug, carpet, and upholstery repair

and cleaning; fur storage and repair; golf and country clubs

and all commercial recreation; gun and camera repair; house

and building moving; household appliance, television, and

radio repair; janitorial and building maintenance or cleaning;

jewelry and watch repair; lawn care, landscaping, and tree

trimming and removal; limousine service, including driver;

machine operator; machine repair of all kinds; motor repair;

motorcycle, scooter, and bicycle repair; oilers and

lubricators; office and business machine repair; painting,

papering, and interior decorating; parking facilities; pay

television; pet grooming; pipe fitting and plumbing; wood

preparation; executive search agencies; private employment

agencies, excluding services for placing a person in

employment where the principal place of employment of that

person is to be located outside of the state; reflexology;

security and detective services; sewage services for

nonresidential commercial operations; sewing and stitching;

shoe repair and shoeshine; sign construction and installation;

storage of household goods, mini-storage, and warehousing of

raw agricultural products; swimming pool cleaning and

maintenance; tanning beds or salons; taxidermy services;

telephone answering service; test laboratories, including

mobile testing laboratories and field testing by testing

laboratories, and excluding tests on humans or animals;

termite, bug, roach, and pest eradicators; tin and sheet metal

repair; Turkish baths, massage, and reducing salons, excluding

services provided by massage therapists licensed under chapter

152C; water conditioning and softening; weighing; welding;

well drilling; wrapping, packing, and packaging of merchandise

other than processed meat, fish, fowl, and vegetables;

wrecking service; wrecker and towing.

For the purposes of this subsection, the sales price of a

lease or rental includes rents, royalties, and copyright and

license fees. For the purposes of this subsection, "financial

institutions" means all national banks, federally chartered

savings and loan associations, federally chartered savings

banks, federally chartered credit unions, banks organized

under chapter 524, savings and loan associations and savings

banks organized under chapter 534, and credit unions organized

under chapter 533.

7.

a. A tax of five percent is imposed upon the sales

price from the sales, furnishing, or service of solid waste

collection and disposal service.

For purposes of this subsection, "solid waste" means

garbage, refuse, sludge from a water supply treatment plant or

air contaminant treatment facility, and other discarded waste

materials and sludges, in solid, semisolid, liquid, or

contained gaseous form, resulting from nonresidential

commercial operations, but does not include auto hulks; street

sweepings; ash; construction debris; mining waste; trees;

tires; lead acid batteries; used oil; hazardous waste; animal

waste used as fertilizer; earthen fill, boulders, or rock;

foundry sand used for daily cover at a sanitary landfill;

sewage sludge; solid or dissolved material in domestic sewage

or other common pollutants in water resources, such as silt,

dissolved or suspended solids in industrial waste water

effluents or discharges which are point sources subject to

permits under section 402 of the federal Water Pollution

Control Act, or dissolved materials in irrigation return

flows; or source, special nuclear, or by-product material

defined by the federal Atomic Energy Act of 1954.

A recycling facility that separates or processes recyclable

materials and that reduces the volume of the waste by at least

eighty-five percent is exempt from the tax imposed by this

subsection if the waste exempted is collected and disposed of

separately from other solid waste.

b. A person who transports solid waste generated by that

person or another person without compensation shall pay the

tax imposed by this subsection at the collection or disposal

facility based on the disposal charge or tipping fee.

However, the costs of a service or portion of a service to

collect and manage recyclable materials separated from solid

waste by the waste generator are exempt from the tax imposed

by this subsection.

8.

a. A tax of five percent is imposed upon the sales

price from sales of bundled services contracts. For purposes

of this subsection, a "bundled services contract" means an

agreement providing for a retailer's performance of services,

one or more of which is a taxable service enumerated in this

section and one or more of which is not, in return for a

consumer's or user's single payment for the performance of the

services, with no separate statement to the consumer or user

of what portion of that payment is attributable to any one

service which is a part of the contract.

b. For purposes of the administration of the tax on

bundled services contracts, the director may enter into

agreements of limited duration with individual retailers,

groups of retailers, or organizations representing retailers

of bundled services contracts. Such an agreement shall impose

the tax rate only upon that portion of the sales price from a

bundled services contract which is attributable to taxable

services provided under the contract.

9. A tax of five percent is imposed upon the sales price

from any mobile telecommunications service which this state is

allowed to tax by the provisions of the federal Mobile

Telecommunications Sourcing Act, Pub. L. No. 106-252, 4 U.S.C.

§ 116 et seq. For purposes of this subsection, taxes on

mobile telecommunications service, as defined under the

federal Mobile Telecommunications Sourcing Act that are deemed

to be provided by the customer's home service provider, shall

be paid to the taxing jurisdiction whose territorial limits

encompass the customer's place of primary use, regardless of

where the mobile telecommunications service originates,

terminates, or passes through and shall in all other respects

be taxed in conformity with the federal Mobile

Telecommunications Sourcing Act. All other provisions of the

federal Mobile Telecommunications Sourcing Act are adopted by

the state of Iowa and incorporated into this subsection by

reference. With respect to mobile telecommunications service

under the federal Mobile Telecommunications Sourcing Act, the

director shall, if requested, enter into agreements consistent

with the provisions of the federal Act.

10. All revenues arising under the operation of the

provisions of this section shall be deposited into the general

fund of the state.

Sec. 96. NEW SECTION 423.3 EXEMPTIONS.

There is exempted from the provisions of this subchapter

and from the computation of the amount of tax imposed by it

the following:

1. The sales price from sales of tangible personal

property and services furnished which this state is prohibited

from taxing under the Constitution or laws of the United

States or under the Constitution of this state.

2. The sales price of sales for resale of tangible

personal property or taxable services, or for resale of

tangible personal property in connection with the furnishing

of taxable services.

3. The sales price of agricultural breeding livestock and

domesticated fowl.

4. The sales price of commercial fertilizer.

5. The sales price of agricultural limestone, herbicide,

pesticide, insecticide, including adjuvants, surfactants, and

other products directly related to the application enhancement

of those products, food, medication, or agricultural drain

tile, including installation of agricultural drain tile, any

of which are to be used in disease control, weed control,

insect control, or health promotion of plants or livestock

produced as part of agricultural production for market.

6. The sales price of tangible personal property which

will be consumed as fuel in creating heat, power, or steam for

grain drying, or for providing heat or cooling for livestock

buildings or for greenhouses or buildings or parts of

buildings dedicated to the production of flowering,

ornamental, or vegetable plants intended for sale in the

ordinary course of business, or for use in cultivation of

agricultural products by aquaculture, or in implements of

husbandry engaged in agricultural production.

7. The sales price of services furnished by specialized

flying implements of husbandry used for agricultural aerial

spraying.

8. The sales price exclusive of services of farm machinery

and equipment, including auxiliary attachments which improve

the performance, safety, operation, or efficiency of the

machinery and equipment and replacement parts, if the

following conditions are met:

a. The farm machinery and equipment shall be directly and

primarily used in production of agricultural products.

b. The farm machinery and equipment shall constitute self-

propelled implements or implements customarily drawn or

attached to self-propelled implements or the farm machinery or

equipment is a grain dryer.

c. The replacement part is essential to any repair or

reconstruction necessary to the farm machinery's or

equipment's exempt use in the production of agricultural

products.

Vehicles subject to registration, as defined in section

423.1, or replacement parts for such vehicles, are not

eligible for this exemption.

9. The sales price of wood chips, sawdust, hay, straw,

paper, or other materials used for bedding in the production

of agricultural livestock or fowl.

10. The sales price of gas, electricity, water, or heat to

be used in implements of husbandry engaged in agricultural

production.

11. The sales price exclusive of services of farm

machinery and equipment, including auxiliary attachments which

improve the performance, safety, operation, or efficiency of

the machinery and equipment and replacement parts, if all of

the following conditions are met:

a. The implement, machinery, or equipment is directly and

primarily used in livestock or dairy production, aquaculture

production, or the production of flowering, ornamental, or

vegetable plants.

b. The implement is not a self-propelled implement or

implement customarily drawn or attached to self-propelled

implements.

c. The replacement part is essential to any repair or

reconstruction necessary to the farm machinery's or

equipment's exempt use in livestock or dairy production,

aquaculture production, or the production of flowering,

ornamental, or vegetable plants.

12. The sales price, exclusive of services, from sales of

irrigation equipment used in farming operations.

13. The sales price from the sale or rental of irrigation

equipment, whether installed above or below ground, to a

contractor or farmer if the equipment will be primarily used

in agricultural operations.

14. The sales price from the sales of horses, commonly

known as draft horses, when purchased for use and so used as

draft horses.

15. The sales price from the sale of property which is a

container, label, carton, pallet, packing case, wrapping,

baling wire, twine, bag, bottle, shipping case, or other

similar article or receptacle sold for use in agricultural,

livestock, or dairy production.

16. The sales price from the sale of feed and feed

supplements and additives when used for consumption by farm

deer or bison.

17. The sales price of all goods, wares, or merchandise,

or services, used for educational purposes sold to any private

nonprofit educational institution in this state. For the

purpose of this subsection, "educational institution" means an

institution which primarily functions as a school, college, or

university with students, faculty, and an established

curriculum. The faculty of an educational institution must be

associated with the institution and the curriculum must

include basic courses which are offered every year.

"Educational institution" includes an institution primarily

functioning as a library.

18. The sales price of tangible personal property sold, or

of services furnished, to the following nonprofit

corporations:

a. Residential care facilities and intermediate care

facilities for persons with mental retardation and residential

care facilities for persons with mental illness licensed by

the department of inspections and appeals under chapter 135C.

b. Residential facilities licensed by the department of

human services pursuant to chapter 237, other than those

maintained by individuals as defined in section 237.1,

subsection 7.

c. Rehabilitation facilities that provide accredited

rehabilitation services to persons with disabilities which are

accredited by the commission on accreditation of

rehabilitation facilities or the accreditation council for

services for persons with mental retardation and other persons

with developmental disabilities and adult day care services

approved for reimbursement by the state department of human

services.

d. Community mental health centers accredited by the

department of human services pursuant to chapter 225C.

e. Community health centers as defined in 42 U.S.C. §

254(c) and migrant health centers as defined in 42 U.S.C. §

254(b).

19. The sales price of tangible personal property sold to

a nonprofit organization which was organized for the purpose

of lending the tangible personal property to the general

public for use by them for nonprofit purposes.

20. The sales price of tangible personal property sold, or

of services furnished, to nonprofit legal aid organizations.

21. The sales price of goods, wares, or merchandise, or of

services, used for educational, scientific, historic

preservation, or aesthetic purpose sold to a nonprofit private

museum.

22. The sales price from sales of goods, wares, or

merchandise, or from services furnished, to a nonprofit

private art center to be used in the operation of the art

center.

23. The sales price of tangible personal property sold, or

of services furnished, by a fair society organized under

chapter 174.

24. The sales price from services furnished by the

notification center established pursuant to section 480.3, and

the vendor selected pursuant to section 480.3 to provide the

notification service.

25. The sales price of food and beverages sold for human

consumption by a nonprofit organization which principally

promotes a food or beverage product for human consumption

produced, grown, or raised in this state and whose income is

exempt from federal taxation under section 501(c) of the

Internal Revenue Code.

26. The sales price of tangible personal property sold, or

of services furnished, to a statewide nonprofit organ

procurement organization, as defined in section 142C.2.

27. The sales price of tangible personal property sold, or

of services furnished, to a nonprofit hospital licensed

pursuant to chapter 135B to be used in the operation of the

hospital.

28. The sales price of tangible personal property sold, or

of services furnished, to a freestanding nonprofit hospice

facility which operates a hospice program as defined in 42

C.F.R., ch. IV, § 418.3, which property or services are to be

used in the hospice program.

29. The sales price of all goods, wares, or merchandise

sold, or of services furnished, which are used in the

fulfillment of a written construction contract with a

nonprofit hospital licensed pursuant to chapter 135B if all of

the following apply:

a. The sales and delivery of the goods, wares, or

merchandise, or the services furnished occurred between July

1, 1998, and December 31, 2001.

b. The written construction contract was entered into

prior to December 31, 1999, or bonds to fund the construction

were issued prior to December 31, 1999.

c. The sales or services were purchased by a contractor as

the agent for the hospital or were purchased directly by the

hospital.

30. The sales price of livestock ear tags sold by a

nonprofit organization whose income is exempt from federal

taxation under section 501(c)(6) of the Internal Revenue Code

where the proceeds are used in bovine research programs

selected or approved by such organization.

31. The sales price of goods, wares, or merchandise sold

to and of services furnished, and used for public purposes

sold to a tax-certifying or tax-levying body of the state or a

governmental subdivision of the state, including regional

transit systems, as defined in section 324A.1, the state board

of regents, department of human services, state department of

transportation, any municipally owned solid waste facility

which sells all or part of its processed waste as fuel to a

municipally owned public utility, and all divisions, boards,

commissions, agencies, or instrumentalities of state, federal,

county, or municipal government which have no earnings going

to the benefit of an equity investor or stockholder, except

any of the following:

a. The sales price of goods, wares, or merchandise sold

to, or of services furnished, and used by or in connection

with the operation of any municipally owned public utility

engaged in selling gas, electricity, heat, or pay television

service to the general public.

b. The sales price of furnishing of sewage services to a

county or municipality on behalf of nonresidential commercial

operations.

c. The furnishing of solid waste collection and disposal

service to a county or municipality on behalf of

nonresidential commercial operations located within the county

or municipality.

The exemption provided by this subsection shall also apply

to all such sales of goods, wares, or merchandise or of

services furnished and subject to use tax.

32. The sales price of tangible personal property sold, or

of services furnished, by a county or city. This exemption

does not apply to any of the following:

a. The tax specifically imposed under section 423.2 on the

sales price from sales or furnishing of gas, electricity,

water, heat, pay television service, or communication service

to the public by a municipal corporation in its proprietary

capacity.

b. The sale or furnishing of solid waste collection and

disposal service to nonresidential commercial operations.

c. The sale or furnishing of sewage service for

nonresidential commercial operations.

d. Fees paid to cities and counties for the privilege of

participating in any athletic sports.

33. The sales price of mementos and other items relating

to Iowa history and historic sites, the general assembly, and

the state capitol, sold by the legislative service bureau and

its legislative information office on the premises of property

under the control of the legislative council, at the state

capitol, and on other state property.

34. The sales price from sales of mementos and other items

relating to Iowa history and historic sites by the department

of cultural affairs on the premises of property under its

control and at the state capitol.

35. The sales price from sales or services furnished by

the state fair organized under chapter 173.

36. The sales price from sales of tangible personal

property or of the sale or furnishing of electrical energy,

natural or artificial gas, or communication service to another

state or political subdivision of another state if the other

state provides a similar reciprocal exemption for this state

and political subdivision of this state.

37. The sales price of services on or connected with new

construction, reconstruction, alteration, expansion,

remodeling, or the services of a general building contractor,

architect, or engineer.

38. The sales price from the sale of building materials,

supplies, or equipment sold to rural water districts organized

under chapter 504A as provided in chapter 357A and used for

the construction of facilities of a rural water district.

39. The sales price from "casual sales".

"Casual sales" means:

a. Sales of tangible personal property, or the furnishing

of services, of a nonrecurring nature, by the owner, if the

seller, at the time of the sale, is not engaged for profit in

the business of selling tangible personal property or services

taxed under section 423.2.

b. The sale of all or substantially all of the tangible

personal property or services held or used by a seller in the

course of the seller's trade or business for which the seller

is required to hold a sales tax permit when the seller sells

or otherwise transfers the trade or business to another person

who shall engage in a similar trade or business.

40. The sales price from the sale of automotive fluids to

a retailer to be used either in providing a service which

includes the installation or application of the fluids in or

on a motor vehicle, which service is subject to section 423.2,

subsection 6, or to be installed in or applied to a motor

vehicle which the retailer intends to sell, which sale is

subject to section 423.26. For purposes of this subsection,

automotive fluids are all those which are refined,

manufactured, or otherwise processed and packaged for sale

prior to their installation in or application to a motor

vehicle. They include but are not limited to motor oil and

other lubricants, hydraulic fluids, brake fluid, transmission

fluid, sealants, undercoatings, antifreeze, and gasoline

additives.

41. The sales price from the rental of motion picture

films, video and audio tapes, video and audio discs, records,

photos, copy, scripts, or other media used for the purpose of

transmitting that which can be seen, heard, or read, if either

of the following conditions are met:

a. The lessee imposes a charge for the viewing of such

media and the charge for the viewing is subject to taxation

under this subchapter or is subject to use tax.

b. The lessee broadcasts the contents of such media for

public viewing or listening.

42. The sales price from the sale of tangible personal

property consisting of advertising material including paper to

a person in Iowa if that person or that person's agent will,

subsequent to the sale, send that advertising material outside

this state and the material is subsequently used solely

outside of Iowa. For the purpose of this subsection,

"advertising material" means any brochure, catalog, leaflet,

flyer, order form, return envelope, or similar item used to

promote sales of property or services.

43. The sales price from the sale of property or of

services performed on property which the retailer transfers to

a carrier for shipment to a point outside of Iowa, places in

the United States mail or parcel post directed to a point

outside of Iowa, or transports to a point outside of Iowa by

means of the retailer's own vehicles, and which is not

thereafter returned to a point within Iowa, except solely in

the course of interstate commerce or transportation. This

exemption shall not apply if the purchaser, consumer, or their

agent, other than a carrier, takes physical possession of the

property in Iowa.

44. The sales price from the sale of property which is a

container, label, carton, pallet, packing case, wrapping

paper, twine, bag, bottle, shipping case, or other similar

article or receptacle sold to retailers or manufacturers for

the purpose of packaging or facilitating the transportation of

tangible personal property sold at retail or transferred in

association with the maintenance or repair of fabric or

clothing.

45. The sales price from sales or rentals to a printer or

publisher of the following: acetate; anti-halation backing;

antistatic spray; back lining; base material used as a carrier

for light sensitive emulsions; blankets; blow-ups; bronze

powder; carbon tissue; codas; color filters; color

separations; contacts; continuous tone separations; creative

art; custom dies and die cutting materials; dampener sleeves;

dampening solution; design and styling; diazo coating; dot

etching; dot etching solutions; drawings; drawsheets; driers;

duplicate films or prints; electronically digitized images;

electrotypes; end product of image modulation; engravings;

etch solutions; film; finished art or final art; fix; fixative

spray; flats; flying pasters; foils; goldenrod paper; gum;

halftones; illustrations; ink; ink paste; keylines; lacquer;

lasering images; layouts; lettering; line negatives and

positives; linotypes; lithographic offset plates; magnesium

and zinc etchings; masking paper; masks; masters; mats; mat

service; metal toner; models and modeling; mylar; negatives;

nonoffset spray; opaque film process paper; opaquing; padding

compound; paper stock; photographic materials: acids, plastic

film, desensitizer emulsion, exposure chemicals, fix,

developers, and paper; photography, day rate; photopolymer

coating; photographs; photostats; photo-display tape;

phototypesetter materials; ph-indicator sticks; positives;

press pack; printing cylinders; printing plates, all types;

process lettering; proof paper; proofs and proof processes,

all types; pumice powder; purchased author alterations;

purchased composition; purchased phototypesetting; purchased

stripping and pasteups; red litho tape; reducers; roller

covering; screen tints; sketches; stepped plates; stereotypes;

strip types; substrate; tints; tissue overlays; toners;

transparencies; tympan; typesetting; typography; varnishes;

veloxes; wood mounts; and any other items used in a like

capacity to any of the above enumerated items by the printer

or publisher to complete a finished product for sale at

retail. Expendable tools and supplies which are not

enumerated in this subsection are excluded from the exemption.

"Printer" means that portion of a person's business engaged in

printing that completes a finished product for ultimate sale

at retail or means that portion of a person's business used to

complete a finished printed packaging material used to package

a product for ultimate sale at retail. "Printer" does not

mean an in-house printer who prints or copyrights its own

materials.

46.

a. The sales price from the sale or rental of

computers, machinery, and equipment, including replacement

parts, and materials used to construct or self-construct

computers, machinery, and equipment if such items are any of

the following:

(1) Directly and primarily used in processing by a

manufacturer.

(2) Directly and primarily used to maintain the integrity

of the product or to maintain unique environmental conditions

required for either the product or the computers, machinery,

and equipment used in processing by a manufacturer, including

test equipment used to control quality and specifications of

the product.

(3) Directly and primarily used in research and

development of new products or processes of processing.

(4) Computers used in processing or storage of data or

information by an insurance company, financial institution, or

commercial enterprise.

(5) Directly and primarily used in recycling or

reprocessing of waste products.

(6) Pollution-control equipment used by a manufacturer,

including but not limited to that required or certified by an

agency of this state or of the United States government.

b. The sales price from the sale of fuel used in creating

heat, power, steam, or for generating electrical current, or

from the sale of electricity, consumed by computers,

machinery, or equipment used in an exempt manner described in

paragraph "a", subparagraph (1), (2), (3), (5), or (6).

c. The sales price from the sale or rental of the

following shall not be exempt from the tax imposed by this

subchapter:

(1) Hand tools.

(2) Point-of-sale equipment and computers.

(3) Industrial machinery, equipment, and computers,

including pollution-control equipment within the scope of

section 427A.1, subsection 1, paragraphs "h" and "i".

(4) Vehicles subject to registration, except vehicles

subject to registration which are directly and primarily used

in recycling or reprocessing of waste products.

d. As used in this subsection:

(1) "Commercial enterprise" includes businesses and

manufacturers conducted for profit and centers for data

processing services to insurance companies, financial

institutions, businesses, and manufacturers, but excludes

professions and occupations and nonprofit organizations.

(2) "Financial institution" means as defined in section

527.2.

(3) "Insurance company" means an insurer organized or

operating under chapter 508, 514, 515, 518, 518A, 519, or 520,

or authorized to do business in Iowa as an insurer or an

insurance producer under chapter 522B.

(4) "Manufacturer" means as defined in section 428.20, but

also includes contract manufacturers. A contract manufacturer

is a manufacturer that otherwise falls within the definition

of manufacturer under section 428.20, except that a contract

manufacturer does not sell the tangible personal property the

contract manufacturer processes on behalf of other

manufacturers. A business engaged in activities subsequent to

the extractive process of quarrying or mining, such as

crushing, washing, sizing, or blending of aggregate materials,

is a manufacturer with respect to these activities.

(5) "Processing" means a series of operations in which

materials are manufactured, refined, purified, created,

combined, or transformed by a manufacturer, ultimately into

tangible personal property. Processing encompasses all

activities commencing with the receipt or producing of raw

materials by the manufacturer and ending at the point products

are delivered for shipment or transferred from the

manufacturer. Processing includes but is not limited to

refinement or purification of materials; treatment of

materials to change their form, context, or condition;

maintenance of the quality or integrity of materials,

components, or products; maintenance of environmental

conditions necessary for materials, components, or products;

quality control activities; and construction of packaging and

shipping devices, placement into shipping containers or any

type of shipping devices or medium, and the movement of

materials, components, or products until shipment from the

processor.

(6) "Receipt or producing of raw materials" means

activities performed upon tangible personal property only.

With respect to raw materials produced from or upon real

estate, the receipt or producing of raw materials is deemed to

occur immediately following the severance of the raw materials

from the real estate.

47. The sales price from the furnishing of the design and

installation of new industrial machinery or equipment,

including electrical and electronic installation.

48. The sales price from the sale of carbon dioxide in a

liquid, solid, or gaseous form, electricity, steam, and other

taxable services when used by a manufacturer of food products

to produce marketable food products for human consumption,

including but not limited to treatment of material to change

its form, context, or condition, in order to produce the food

product, maintenance of quality or integrity of the food

product, changing or maintenance of temperature levels

necessary to avoid spoilage or to hold the food product in

marketable condition, maintenance of environmental conditions

necessary for the safe or efficient use of machinery and

material used to produce the food product, sanitation and

quality control activities, formation of packaging, placement

into shipping containers, and movement of the material or food

product until shipment from the building of manufacture.

49. The sales price of sales of electricity, steam, or any

taxable service when purchased and used in the processing of

tangible personal property intended to be sold ultimately at

retail.

50. The sales price of tangible personal property sold for

processing. Tangible personal property is sold for processing

within the meaning of this subsection only when it is intended

that the property will, by means of fabrication, compounding,

manufacturing, or germination, become an integral part of

other tangible personal property intended to be sold

ultimately at retail; or for generating electric current; or

the property is a chemical, solvent, sorbent, or reagent,

which is directly used and is consumed, dissipated, or

depleted, in processing tangible personal property which is

intended to be sold ultimately at retail or consumed in the

maintenance or repair of fabric or clothing, and which may not

become a component or integral part of the finished product.

The distribution to the public of free newspapers or shoppers

guides is a retail sale for purposes of the processing

exemption set out in this subsection and in subsection 49.

51. The sales price from the sale of argon and other

similar gases to be used in the manufacturing process.

52. The sales price from the sale of electricity to water

companies assessed for property tax pursuant to sections

428.24, 428.26, and 428.28 which is used solely for the

purpose of pumping water from a river or well.

53. The sales price from the sale of wind energy

conversion property to be used as an electric power source and

the sale of the materials used to manufacture, install, or

construct wind energy conversion property used or to be used

as an electric power source.

For purposes of this subsection, "wind energy conversion

property" means any device, including, but not limited to, a

wind charger, windmill, wind turbine, tower and electrical

equipment, pad mount transformers, power lines, and

substation, which converts wind energy to a form of usable

energy.

54. The sales price from the sales of newspapers, free

newspapers, or shoppers guides and the printing and publishing

of such newspapers and shoppers guides, and envelopes for

advertising.

55. The sales price from the sale of motor fuel and

special fuel consumed for highway use or in watercraft or

aircraft where the fuel tax has been imposed and paid and no

refund has been or will be allowed and the sales price from

the sales of ethanol blended gasoline, as defined in section

452A.2.

56. The sales price from all sales of food and food

ingredients. However, as used in this subsection, "food" does

not include alcoholic beverages, candy, dietary supplements,

food sold through vending machines, prepared food, soft

drinks, and tobacco.

For the purposes of this subsection:

a. "Alcoholic beverages" means beverages that are suitable

for human consumption and contain one-half of one percent or

more of alcohol by volume.

b. "Candy" means a preparation of sugar, honey, or other

natural or artificial sweeteners in combination with

chocolate, fruits, nuts, or other ingredients or flavorings in

the form of bars, drops, or pieces. Candy shall not include

any preparation containing flour and shall require no

refrigeration.

c. "Dietary supplement" means any product, other than

tobacco, intended to supplement the diet that contains one or

more of the following dietary ingredients:

(1) A vitamin.

(2) A mineral.

(3) An herb or other botanical.

(4) An amino acid.

(5) A dietary substance for use by humans to supplement

the diet by increasing the total dietary intake.

(6) A concentrate, metabolite, constituent, extract, or

combination of any of the ingredients in subparagraphs (1)

through (5) that is intended for ingestion in tablet, capsule,

powder, softgel, gelcap, or liquid form, or if not intended

for ingestion in such a form, is not represented as

conventional food and is not represented for use as a sole

item of a meal or of the diet; and is required to be labeled

as a dietary supplement, identifiable by the "supplement

facts" box found on the label and as required pursuant to 21

C.F.R. § 101.36.

d. "Food and food ingredients" means substances, whether

in liquid, concentrated, solid, frozen, dried, or dehydrated

form, that are sold for ingestion or chewing by humans and are

consumed for their taste or nutritional value.

e. "Food sold through vending machines" means food

dispensed from a machine or other mechanical device that

accepts payment, other than food which would be qualified for

exemption under subsection 57 if purchased with a coupon

described in subsection 57.

f. "Prepared food" means any of following:

(1) Food sold in a heated state or heated by the seller,

including food sold by a caterer.

(2) Two or more food ingredients mixed or combined by the

seller for sale as a single item.

(3) "Prepared food", for the purposes of this paragraph,

does not include food that is any of the following:

(a) Only cut, repackaged, or pasteurized by the seller.

(b) Eggs, fish, meat, poultry, and foods containing these

raw animal foods requiring cooking by the consumer as

recommended by the United States food and drug administration

in chapter 3, part 401.11 of its food code, so as to prevent

food borne illnesses.

(c) Bakery items sold by the seller which baked them. The

words "bakery items" includes but is not limited to breads,

rolls, buns, biscuits, bagels, croissants, pastries, donuts,

Danish, cakes, tortes, pies, tarts, muffins, bars, cookies,

and tortillas.

(d) Food sold without eating utensils provided by the

seller in an unheated state as a single item which is priced

by weight or volume.

(4) Food sold with eating utensils provided by the seller,

including plates, knives, forks, spoons, glasses, cups,

napkins, or straws. A plate does not include a container or

packaging used to transport food.

g. "Soft drinks" means nonalcoholic beverages that contain

natural or artificial sweeteners. "Soft drinks" does not

include beverages that contain milk or milk products; soy,

rice, or similar milk substitutes; or greater than fifty

percent of vegetable or fruit juice by volume.

f. "Tobacco" means cigarettes, cigars, chewing or pipe

tobacco, or any other item that contains tobacco.

57. The sales price from the sale of items purchased with

coupons issued under the federal Food Stamp Act of 1977, 7

U.S.C. § 2011 et seq.

58. In transactions in which tangible personal property is

traded toward the sales price of other tangible personal

property, that portion of the sales price which is not payable

in money to the retailer is exempted from the taxable amount

if the following conditions are met:

a. The tangible personal property traded to the retailer

is the type of property normally sold in the regular course of

the retailer's business.

b. The tangible personal property traded to the retailer

is intended by the retailer to be ultimately sold at retail or

is intended to be used by the retailer or another in the

remanufacturing of a like item.

59. The sales price from the sale or rental of

prescription drugs or medical devices intended for human use

or consumption.

For the purposes of this subsection:

a. "Drug" means a compound, substance, or preparation, and

any component of a compound, substance, or preparation, other

than food and food ingredients, dietary supplements, or

alcoholic beverages which is any of the following:

(1) Recognized in the official United States

pharmacopoeia, official homeopathic pharmacopoeia of the

United States, or official national formulary, and supplement

to any of them.

(2) Intended for use in the diagnosis, cure, mitigation,

treatment, or prevention of disease.

(3) Intended to affect the structure or any function of

the body.

b. "Medical device" means equipment or a supply, intended

to be prescribed by a practitioner, including orthopedic or

orthotic devices. However, "medical device" also includes

prosthetic devices, ostomy, urological, and tracheostomy

equipment and supplies, and diabetic testing materials,

hypodermic syringes and needles, anesthesia trays, biopsy

trays and biopsy needles, cannula systems, catheter trays and

invasive catheters, dialyzers, drug infusion devices, fistula

sets, hemodialysis devices, insulin infusion devices,

intraocular lenses, irrigation solutions, intravenous

administering sets, solutions and stopcocks, myelogram trays,

nebulizers, small vein infusion kits, spinal puncture trays,

transfusion sets, venous blood sets, and oxygen equipment,

intended to be dispensed for human use with or without a

prescription to an ultimate user.

c. "Practitioner" means a practitioner as defined in

section 155A.3, or a person licensed to prescribe drugs.

d. "Prescription drug" means a drug intended to be

dispensed to an ultimate user pursuant to a prescription drug

order, formula, or recipe issued in any form of oral, written,

electronic, or other means of transmission by a duly licensed

practitioner, or oxygen or insulin dispensed for human

consumption with or without a prescription drug order or

medication order.

e. "Prosthetic device" means a replacement, corrective, or

supportive device including repair and replacement parts for

the same worn on or in the body to do any of the following:

(1) Artificially replace a missing portion of the body.

(2) Prevent or correct physical deformity or malfunction.

(3) Support a weak or deformed portion of the body.

f. "Ultimate user" means an individual who has lawfully

obtained and possesses a prescription drug or medical device

for the individual's own use or for the use of a member of the

individual's household, or an individual to whom a

prescription drug or medical device has been lawfully

supplied, administered, dispensed, or prescribed.

60. The sales price from services furnished by aerial

commercial and charter transportation services.

61. The sales price from the sale of raffle tickets for a

raffle licensed pursuant to section 99B.5.

62. The sales price from the sale of tangible personal

property which will be given as prizes to players in games of

skill, games of chance, raffles, and bingo games as defined in

chapter 99B.

63. The sales price from the sale of a modular home, as

defined in section 435.1, to the extent of the portion of the

purchase price of the modular home which is not attributable

to the cost of the tangible personal property used in the

processing of the modular home. For purposes of this

exemption, the portion of the purchase price which is not

attributable to the cost of the tangible personal property

used in the processing of the modular home is forty percent.

64. The sales price from charges paid to a provider for

access to on-line computer services. For purposes of this

subsection, "on-line computer service" means a service that

provides or enables computer access by multiple users to the

internet or to other information made available through a

computer server.

65. The sales price from the sale or rental of information

services. "Information services" means every business

activity, process, or function by which a seller or its agent

accumulates, prepares, organizes, or conveys data, facts,

knowledge, procedures, and like services to a buyer or its

agent of such information through any tangible or intangible

medium. Information accumulated, prepared, or organized for a

buyer or its agent is an information service even though it

may incorporate preexisting components of data or other

information. "Information services" includes, but is not

limited to, database files, mailing lists, subscription files,

market research, credit reports, surveys, real estate

listings, bond rating reports, abstracts of title, bad check

lists, broadcasting rating services, wire services, and

scouting reports, or other similar items.

66. The sales price of a sale at retail if the substance

of the transaction is delivered to the purchaser digitally,

electronically, or utilizing cable, or by radio waves,

microwaves, satellites, or fiber optics.

67.

a. The sales price from the sale of an article of

clothing designed to be worn on or about the human body if all

of the following apply:

(1) The sales price of the article is less than one

hundred dollars.

(2) The sale takes place during a period beginning at

12:01 a.m. on the first Friday in August and ending at

midnight on the following Saturday.

b. This subsection does not apply to any of the following:

(1) Sport or recreational equipment and protective

equipment.

(2) Clothing accessories or equipment.

(3) The rental of clothing.

c. For purposes of this subsection:

(1) "Clothing" means all human wearing apparel suitable

for general use. "Clothing" includes, but is not limited to

the following: aprons, household and shop; athletic

supporters; baby receiving blankets; bathing suits and caps;

beach capes and coats; belts and suspenders; boots; coats and

jackets; costumes; diapers (children and adults, including

disposable diapers); earmuffs; footlets; formal wear; garters

and garter belts; girdles; gloves and mittens for general use;

hats and caps; hosiery; insoles for shoes; lab coats;

neckties; overshoes; pantyhose; rainwear; rubber pants;

sandals; scarves; shoes and shoelaces; slippers; sneakers;

socks and stockings; steel-toed shoes; underwear; uniforms,

athletic and nonathletic; and wedding apparel.

"Clothing" does not include the following: belt buckles

sold separately; costume masks sold separately; patches and

emblems sold separately; sewing equipment and supplies

(including, but not limited to, knitting needles, patterns,

pins, scissors, sewing machines, sewing needles, tape

measures, and thimbles); and sewing materials that become part

of clothing (including, but not limited to, buttons, fabric,

lace, thread, yarn, and zippers).

(2) "Clothing accessories or equipment" means incidental

items worn on the person or in conjunction with clothing.

"Clothing accessories or equipment" includes, but is not

limited to, the following: briefcases; cosmetics; hair

notions (including, but not limited to, barrettes, hair bows,

and hair nets); handbags; handkerchiefs; jewelry; sunglasses,

nonprescription; umbrellas; wallets; watches; and wigs and

hairpieces.

(3) "Protective equipment" means items for human wear and

designed as protection for the wearer against injury or

disease or as protection against damage or injury of other

persons or property but not suitable for general use.

"Protective equipment" includes, but is not limited to, the

following: breathing masks; clean room apparel and equipment;

ear and hearing protectors; face shields; hard hats; helmets;

paint or dust respirators; protective gloves; safety glasses

and goggles; safety belts; tool belts; and welders gloves and

masks.

(4) "Sport or recreational equipment" means items designed

for human use and worn in conjunction with an athletic or

recreational activity that are not suitable for general use.

"Sport or recreational equipment" includes, but is not limited

to, the following: ballet and tap shoes; cleated or spiked

athletic shoes; gloves (including, but not limited to,

baseball, bowling, boxing, hockey, and golf); goggles; hand

and elbow guards; life preservers and vests; mouth guards;

roller and ice skates; shin guards; shoulder pads; ski boots;

waders; and wetsuits and fins.

68.

a. Subject to paragraph "b", the sales price from the

sale or furnishing of metered gas, electricity, and fuel,

including propane and heating oil, to residential customers

which is used to provide energy for residential dwellings and

units of apartment and condominium complexes used for human

occupancy.

b. The exemption in this subsection shall be phased in by

means of a reduction in the tax rate as follows:

(1) If the date of the utility billing or meter reading

cycle of the residential customer for the sale or furnishing

of metered gas and electricity is on or after January 1, 2002,

through December 31, 2002, or if the sale or furnishing of

fuel for purposes of residential energy and the delivery of

the fuel occurs on or after January 1, 2002, through December

31, 2002, the rate of tax is four percent of the sales price.

(2) If the date of the utility billing or meter reading

cycle of the residential customer for the sale or furnishing

of metered gas and electricity is on or after January 1, 2003,

through June 30, 2008, or if the sale or furnishing of fuel

for purposes of residential energy and the delivery of the

fuel occurs on or after January 1, 2003, through June 30,

2008, the rate of tax is three percent of the sales price.

(3) If the date of the utility billing or meter reading

cycle of the residential customer for the sale or furnishing

of metered gas and electricity is on or after July 1, 2008,

through June 30, 2009, or if the sale or furnishing of fuel

for purposes of residential energy and the delivery of the

fuel occurs on or after July 1, 2008, through June 30, 2009,

the rate of tax is two percent of the sales price.

(4) If the date of the utility billing or meter reading

cycle of the residential customer for the sale or furnishing

of metered gas and electricity is on or after July 1, 2009,

through June 30, 2010, or if the sale or furnishing of fuel

for purposes of residential energy and the delivery of the

fuel occurs on or after July 1, 2009, through June 30, 2010,

the rate of tax is one percent of the sales price.

(5) If the date of the utility billing or meter reading

cycle of the residential customer for the sale or furnishing

of metered gas and electricity is on or after July 1, 2010, or

if the sale, furnishing, or service of fuel for purposes of

residential energy and the delivery of the fuel occurs on or

after July 1, 2010, the rate of tax is zero percent of the

sales price.

c. The exemption in this subsection does not apply to

local option sales and services tax imposed pursuant to

chapters 423B and 423E.

69. The sales price from charges paid for the delivery of

electricity or natural gas if the sale or furnishing of the

electricity or natural gas or its use is exempt from the tax

on sales prices imposed under this subchapter or from the use

tax imposed under subchapter III.

70. The sales price from the sales, furnishing, or service

of transportation service except the rental of recreational

vehicles or recreational boats, except the rental of motor

vehicles subject to registration which are registered for a

gross weight of thirteen tons or less for a period of sixty

days or less, and except the rental of aircraft for a period

of sixty days or less. This exemption does not apply to the

transportation of electric energy or natural gas.

71. The sales price from sales of tangible personal

property used or to be used as railroad rolling stock for

transporting persons or property, or as materials or parts

therefor.

72. The sales price from the sales of special fuel for

diesel engines consumed or used in the operation of ships,

barges, or waterborne vessels which are used primarily in or

for the transportation of property or cargo, or the conveyance

of persons for hire on rivers bordering on the state if the

fuel is delivered by the seller to the purchaser's barge,

ship, or waterborne vessel while it is afloat upon such a

river.

73. The sales price from sales of vehicles subject to

registration or subject only to the issuance of a certificate

of title and sales of aircraft subject to registration under

section 328.20.

74. The sales price from the sale of aircraft for use in a

scheduled interstate federal aviation administration

certificated air carrier operation.

75. The sales price from the sale or rental of aircraft;

the sale or rental of tangible personal property permanently

affixed or attached as a component part of the aircraft,

including but not limited to repair or replacement materials

or parts; and the sales price of all services used for

aircraft repair, remodeling, and maintenance services when

such services are performed on aircraft, aircraft engines, or

aircraft component materials or parts. For the purposes of

this exemption, "aircraft" means aircraft used in a scheduled

interstate federal aviation administration certificated air

carrier operation.

76. The sales price from the sale or rental of tangible

personal property permanently affixed or attached as a

component part of the aircraft, including but not limited to

repair or replacement materials or parts; and the sales price

of all services used for aircraft repair, remodeling, and

maintenance services when such services are performed on

aircraft, aircraft engines, or aircraft component materials or

parts. For the purposes of this exemption, "aircraft" means

aircraft used in nonscheduled interstate federal aviation

administration certificated air carrier operation operating

under 14 C.F.R. ch. 1, pt. 135.

77. The sales price from the sale of aircraft to an

aircraft dealer who in turn rents or leases the aircraft if

all of the following apply:

a. The aircraft is kept in the inventory of the dealer for

sale at all times.

b. The dealer reserves the right to immediately take the

aircraft from the renter or lessee when a buyer is found.

c. The renter or lessee is aware that the dealer will

immediately take the aircraft when a buyer is found.

If an aircraft exempt under this subsection is used for any

purpose other than leasing or renting, or the conditions in

paragraphs "a", "b", and "c" are not continuously met, the

dealer claiming the exemption under this subsection is liable

for the tax that would have been due except for this

subsection. The tax shall be computed upon the original

purchase price.

78. The sales price from sales or rental of tangible

personal property, or services rendered by any entity where

the profits from the sales or rental of the tangible personal

property, or services rendered are used by or donated to a

nonprofit entity which is exempt from federal income taxation

pursuant to section 501(c)(3) of the Internal Revenue Code, a

government entity, or a nonprofit private educational

institution, and where the entire proceeds from the sales,

rental, or services are expended for any of the following

purposes:

a. Educational.

b. Religious.

c. Charitable. A charitable act is an act done out of

goodwill, benevolence, and a desire to add to or to improve

the good of humankind in general or any class or portion of

humankind, with no pecuniary profit inuring to the person

performing the service or giving the gift.

This exemption does not apply to the sales price from games

of skill, games of chance, raffles, and bingo games as defined

in chapter 99B. This exemption is disallowed on the amount of

the sales price only to the extent the profits from the sales,

rental, or services are not used by or donated to the

appropriate entity and expended for educational, religious, or

charitable purposes.

79. The sales price from the sale or rental of tangible

personal property or from services furnished to a recognized

community action agency as provided in section 216A.93 to be

used for the purposes of the agency.

80.

a. For purposes of this subsection, "designated

exempt entity" means an entity which is designated in section

423.4, subsection 1.

b. If a contractor, subcontractor, or builder is to use

building materials, supplies, and equipment in the performance

of a construction contract with a designated exempt entity,

the person shall purchase such items of tangible personal

property without liability for the tax if such property will

be used in the performance of the construction contract and a

purchasing agent authorization letter and an exemption

certificate, issued by the designated exempt entity, are

presented to the retailer.

c. Where the owner, contractor, subcontractor, or builder

is also a retailer holding a retail sales tax permit and

transacting retail sales of building materials, supplies, and

equipment, the tax shall not be due when materials are

withdrawn from inventory for use in construction performed for

a designated exempt entity if an exemption certificate is

received from such entity.

d. Tax shall not apply to tangible personal property

purchased and consumed by a manufacturer as building

materials, supplies, or equipment in the performance of a

construction contract for a designated exempt entity, if a

purchasing agent authorization letter and an exemption

certificate are received from such entity and presented to a

retailer.

81. The sales price from the sales of lottery tickets or

shares pursuant to chapter 99G.

82. The sales price from the sale or rental of core and

mold making equipment and sand handling equipment directly and

primarily used in the mold making process by a foundry.

83. The sales price from noncustomer point of sale or

noncustomer automated teller machine access or service charges

assessed by a financial institution. For purposes of this

subsection, "financial institution" means the same as defined

in section 527.2.

Sec. 97. NEW SECTION 423.4 REFUNDS.

1. A private nonprofit educational institution in this

state, nonprofit private museum in this state, tax-certifying

or tax-levying body or governmental subdivision of the state,

including the state board of regents, state department of

human services, state department of transportation, a

municipally owned solid waste facility which sells all or part

of its processed waste as fuel to a municipally owned public

utility, and all divisions, boards, commissions, agencies, or

instrumentalities of state, federal, county, or municipal

government which do not have earnings going to the benefit of

an equity investor or stockholder, may make application to the

department for the refund of the sales or use tax upon the

sales price of all sales of goods, wares, or merchandise, or

from services furnished to a contractor, used in the

fulfillment of a written contract with the state of Iowa, any

political subdivision of the state, or a division, board,

commission, agency, or instrumentality of the state or a

political subdivision, a private nonprofit educational

institution in this state, or a nonprofit private museum in

this state if the property becomes an integral part of the

project under contract and at the completion of the project

becomes public property, is devoted to educational uses, or

becomes a nonprofit private museum; except goods, wares, or

merchandise, or services furnished which are used in the

performance of any contract in connection with the operation

of any municipal utility engaged in selling gas, electricity,

or heat to the general public or in connection with the

operation of a municipal pay television system; and except

goods, wares, and merchandise used in the performance of a

contract for a "project" under chapter 419 as defined in that

chapter other than goods, wares, or merchandise used in the

performance of a contract for a "project" under chapter 419

for which a bond issue was approved by a municipality prior to

July 1, 1968, or for which the goods, wares, or merchandise

becomes an integral part of the project under contract and at

the completion of the project becomes public property or is

devoted to educational uses.

a. Such contractor shall state under oath, on forms

provided by the department, the amount of such sales of goods,

wares, or merchandise, or services furnished and used in the

performance of such contract, and upon which sales or use tax

has been paid, and shall file such forms with the governmental

unit, private nonprofit educational institution, or nonprofit

private museum which has made any written contract for

performance by the contractor. The forms shall be filed by

the contractor with the governmental unit, educational

institution, or nonprofit private museum before final

settlement is made.

b. Such governmental unit, educational institution, or

nonprofit private museum shall, not more than one year after

the final settlement has been made, make application to the

department for any refund of the amount of the sales or use

tax which shall have been paid upon any goods, wares, or

merchandise, or services furnished, the application to be made

in the manner and upon forms to be provided by the department,

and the department shall forthwith audit the claim and, if

approved, issue a warrant to the governmental unit,

educational institution, or nonprofit private museum in the

amount of the sales or use tax which has been paid to the

state of Iowa under the contract.

Refunds authorized under this subsection shall accrue

interest at the rate in effect under section 421.7 from the

first day of the second calendar month following the date the

refund claim is received by the department.

c. Any contractor who willfully makes a false report of

tax paid under the provisions of this subsection is guilty of

a simple misdemeanor and in addition shall be liable for the

payment of the tax and any applicable penalty and interest.

2. The refund of sales and use tax paid on transportation

construction projects let by the state department of

transportation is subject to the special provisions of this

subsection.

a. A contractor awarded a contract for a transportation

construction project is considered the consumer of all

building materials, building supplies, and equipment and shall

pay sales tax to the supplier or remit consumer use tax

directly to the department.

b. The contractor is not required to file information with

the state department of transportation stating the amount of

goods, wares, or merchandise, or services rendered, furnished,

or performed and used in the performance of the contract or

the amount of sales or use tax paid.

c. The state department of transportation shall file a

refund claim based on a formula that considers the following:

(1) The quantity of material to complete the contract, and

quantities of items of work.

(2) The estimated cost of these materials included in the

items of work, and the state sales or use tax to be paid on

the tax rate in effect in section 423.2. The quantity of

materials shall be determined after each letting based on the

contract quantities of all items of work let to contract. The

quantity of individual component materials required for each

item shall be determined and maintained in a database. The

total quantities of materials shall be determined by

multiplying the quantities of component materials for each

contract item of work by the total quantities of each contract

item for each letting. Where variances exist in the cost of

materials, the lowest cost shall be used as the base cost.

d. Only the state sales or use tax is refundable. Local

option taxes paid by the contractor are not refundable.

3. A relief agency may apply to the director for refund of

the amount of sales or use tax imposed and paid upon sales to

it of any goods, wares, merchandise, or services furnished,

used for free distribution to the poor and needy.

a. The refunds may be obtained only in the following

amounts and manner and only under the following conditions:

(1) On forms furnished by the department, and filed within

the time as the director shall provide by rule, the relief

agency shall report to the department the total amount or

amounts, valued in money, expended directly or indirectly for

goods, wares, merchandise, or services furnished, used for

free distribution to the poor and needy.

(2) On these forms the relief agency shall separately list

the persons making the sales to it or to its order, together

with the dates of the sales, and the total amount so expended

by the relief agency.

(3) The relief agency must prove to the satisfaction of

the director that the person making the sales has included the

amount thereof in the computation of the sales price of such

person and that such person has paid the tax levied by this

subchapter or subchapter III, based upon such computation of

the sales price.

b. If satisfied that the foregoing conditions and

requirements have been complied with, the director shall

refund the amount claimed by the relief agency.

Sec. 98. NEW SECTION 423.5 IMPOSITION OF TAX.

An excise tax at the rate of five percent of the purchase

price or installed purchase price is imposed on the following:

1. The use in this state of tangible personal property as

defined in section 423.1, including aircraft subject to

registration under section 328.20, purchased for use in this

state. For the purposes of this subchapter, the furnishing or

use of the following services is also treated as the use of

tangible personal property: optional service or warranty

contracts, except residential service contracts regulated

under chapter 523C, vulcanizing, recapping, or retreading

services, engraving, photography, retouching, printing, or

binding services, and communication service when furnished or

delivered to consumers or users within this state.

2. The use of manufactured housing in this state, on the

purchase price if the manufactured housing is sold in the form

of tangible personal property or on the installed purchase

price if the manufactured housing is sold in the form of

realty.

3. The use of leased vehicles, on the amount subject to

tax as calculated pursuant to section 423.27.

4. Purchases of tangible personal property made from the

government of the United States or any of its agencies by

ultimate consumers shall be subject to the tax imposed by this

section. Services purchased from the same source or sources

shall be subject to the service tax imposed by this subchapter

and apply to the user of the services.

5. The use in this state of services enumerated in section

423.2. This tax is applicable where services are furnished in

this state or where the product or result of the service is

used in this state.

6. The excise tax is imposed upon every person using the

property within this state until the tax has been paid

directly to the county treasurer, the state department of

transportation, a retailer, or the department. This tax is

imposed on every person using the services or the product of

the services in this state until the user has paid the tax

either to an Iowa use tax permit holder or to the department.

7. For the purpose of the proper administration of the use

tax and to prevent its evasion, evidence that tangible

personal property was sold by any person for delivery in this

state shall be prima facie evidence that such tangible

personal property was sold for use in this state.

Sec. 99. NEW SECTION 423.6 EXEMPTIONS.

The use in this state of the following tangible personal

property and services is exempted from the tax imposed by this

subchapter:

1. Tangible personal property and enumerated services, the

sales price from the sale of which are required to be included

in the measure of the sales tax, if that tax has been paid to

the department or the retailer. This exemption does not

include vehicles subject to registration or subject only to

the issuance of a certificate of title.

2. The sale of tangible personal property or the

furnishing of services in the regular course of business.

3. Property used in processing. The use of property in

processing within the meaning of this subsection shall mean

and include any of the following:

a. Any tangible personal property including containers

which it is intended shall, by means of fabrication,

compounding, manufacturing, or germination, become an integral

part of other tangible personal property intended to be sold

ultimately at retail, and containers used in the collection,

recovery, or return of empty beverage containers subject to

chapter 455C.

b. Fuel which is consumed in creating power, heat, or

steam for processing or for generating electric current.

c. Chemicals, solvents, sorbents, or reagents, which are

directly used and are consumed, dissipated, or depleted in

processing tangible personal property which is intended to be

sold ultimately at retail, and which may not become a

component or integral part of the finished product.

d. The distribution to the public of free newspapers or

shoppers guides shall be deemed a retail sale for purposes of

the processing exemption in this subsection.

4. All articles of tangible personal property brought into

the state of Iowa by a nonresident individual for the

individual's use or enjoyment while within the state.

5. Services exempt from taxation by the provisions of

section 423.3.

6. Tangible personal property or services the sales price

of which is exempt from the sales tax under section 423.3,

except subsections 39 and 73, as it relates to the sale, but

not the lease or rental, of vehicles subject to registration

or subject only to the issuance of a certificate of title and

as it relates to aircraft subject to registration under

section 328.20.

7. Advertisement and promotional material and matter, seed

catalogs, envelopes for same, and other similar material

temporarily stored in this state which are acquired outside of

Iowa and which, subsequent to being brought into this state,

are sent outside of Iowa, either singly or physically attached

to other tangible personal property sent outside of Iowa.

8. Vehicles, as defined in section 321.1, subsections 41,

64A, 71, 85, and 88, except such vehicles subject to

registration which are designed primarily for carrying

persons, when purchased for lease and actually leased to a

lessee for use outside the state of Iowa and the subsequent

sole use in Iowa is in interstate commerce or interstate

transportation.

9. Tangible personal property which, by means of

fabrication, compounding, or manufacturing, becomes an

integral part of vehicles, as defined in section 321.1,

subsections 41, 64A, 71, 85, and 88, manufactured for lease

and actually leased to a lessee for use outside the state of

Iowa and the subsequent sole use in Iowa is in interstate

commerce or interstate transportation. Vehicles subject to

registration which are designed primarily for carrying persons

are excluded from this subsection.

10. Vehicles subject to registration which are transferred

from a business or individual conducting a business within

this state as a sole proprietorship, partnership, or limited

liability company to a corporation formed by the sole

proprietorship, partnership, or limited liability company for

the purpose of continuing the business when all of the stock

of the corporation so formed is owned by the sole proprietor

and the sole proprietor's spouse, by all the partners in the

case of a partnership, or by all the members in the case of a

limited liability company. This exemption is equally

available where the vehicles subject to registration are

transferred from a corporation to a sole proprietorship,

partnership, or limited liability company formed by that

corporation for the purpose of continuing the business when

all of the incidents of ownership are owned by the same person

or persons who were stockholders of the corporation.

This exemption also applies where the vehicles subject to

registration are transferred from a corporation as part of the

liquidation of the corporation to its stockholders if within

three months of such transfer the stockholders retransfer

those vehicles subject to registration to a sole

proprietorship, partnership, or limited liability company for

the purpose of continuing the business of the corporation when

all of the incidents of ownership are owned by the same person

or persons who were stockholders of the corporation.

10A. Vehicles subject to registration which are

transferred from a corporation that is primarily engaged in

the business of leasing vehicles subject to registration to a

corporation that is primarily engaged in the business of

leasing vehicles subject to registration when the transferor

and transferee corporations are part of the same controlled

group for federal income tax purposes.

11. Vehicles registered or operated under chapter 326 and

used substantially in interstate commerce, section 423.5,

subsection 7, notwithstanding. For purposes of this

subsection, "substantially in interstate commerce" means that

a minimum of twenty-five percent of the miles operated by the

vehicle accrues in states other than Iowa. This subsection

applies only to vehicles which are registered for a gross

weight of thirteen tons or more.

For purposes of this subsection, trailers and semitrailers

registered or operated under chapter 326 are deemed to be used

substantially in interstate commerce and to be registered for

a gross weight of thirteen tons or more.

For the purposes of this subsection, if a vehicle meets the

requirement that twenty-five percent of the miles operated

accrues in states other than Iowa in each year of the first

four-year period of operation, the exemption from use tax

shall continue until the vehicle is sold or transferred. If

the vehicle is found to have not met the exemption

requirements or the exemption was revoked, the value of the

vehicle upon which the use tax shall be imposed is the book or

market value, whichever is less, at the time the exemption

requirements were not met or the exemption was revoked.

12. Mobile homes and manufactured housing the use of which

has previously been subject to the tax imposed under this

subchapter and for which that tax has been paid.

13. Mobile homes to the extent of the portion of the

purchase price of the mobile home which is not attributable to

the cost of the tangible personal property used in the

processing of the mobile home, and manufactured housing to the

extent of the purchase price or the installed purchase price

of the manufactured housing which is not attributable to the

cost of the tangible personal property used in the processing

of the manufactured housing. For purposes of this exemption,

the portion of the purchase price which is not attributable to

the cost of the tangible personal property used in the

processing of the mobile home is forty percent and the portion

of the purchase price or installed purchase price which is not

attributable to the cost of the tangible personal property

used in the processing of the manufactured housing is forty

percent.

14. Tangible personal property used or to be used as a

ship, barge, or waterborne vessel which is used or to be used

primarily in or for the transportation of property or cargo

for hire on the rivers bordering the state or as materials or

parts of such ship, barge, or waterborne vessel.

15. Vehicles subject to registration in any state when

purchased for rental or registered and titled by a motor

vehicle dealer licensed pursuant to chapter 322 for rental

use, and held for rental for a period of one hundred twenty

days or more and actually rented for periods of sixty days or

less by a person regularly engaged in the business of renting

vehicles including, but not limited to, motor vehicle dealers

licensed pursuant to chapter 322 who rent automobiles to

users, if the rental of the vehicles is subject to taxation

under chapter 423C.

16. Motor vehicles subject to registration which were

registered and titled between July 1, 1982, and July 1, 1992,

to a motor vehicle dealer licensed under chapter 322 and which

were rented to a user as defined in section 423C.2 if the

following occurred:

a. The dealer kept the vehicle on the inventory of

vehicles for sale at all times.

b. The vehicle was to be immediately taken from the user

of the vehicle when a buyer was found.

c. The user was aware of this situation.

17. Vehicles subject to registration under chapter 321,

with a gross vehicle weight rating of less than sixteen

thousand pounds, excluding motorcycles and motorized bicycles,

when purchased for lease and titled by the lessor licensed

pursuant to chapter 321F and actually leased for a period of

twelve months or more if the lease of the vehicle is subject

to taxation under section 423.27.

A lessor may maintain the exemption from use tax under this

subsection for a qualifying lease that terminates at the

conclusion or prior to the contracted expiration date, if the

lessor does not use the vehicle for any purpose other than for

lease. Once the vehicle is used by the lessor for a purpose

other than for lease, the exemption from use tax under this

subsection no longer applies and, unless there is an exemption

from the use tax, use tax is due on the fair market value of

the vehicle determined at the time the lessor uses the vehicle

for a purpose other than for lease, payable to the department.

If the lessor holds the vehicle exclusively for sale, use tax

is due and payable on the purchase price of the vehicle at the

time of purchase pursuant to this subchapter.

18. Aircraft for use in a scheduled interstate federal

aviation administration certificated air carrier operation.

19. Aircraft; tangible personal property permanently

affixed or attached as a component part of the aircraft,

including but not limited to repair or replacement materials

or parts; and all services used for aircraft repair,

remodeling, and maintenance services when such services are

performed on aircraft, aircraft engines, or aircraft component

materials or parts. For the purposes of this exemption,

"aircraft" means aircraft used in a scheduled interstate

federal aviation administration certificated air carrier

operation.

20. Tangible personal property permanently affixed or

attached as a component part of the aircraft, including but

not limited to repair or replacement materials or parts; and

all services used for aircraft repair, remodeling, and

maintenance services when such services are performed on

aircraft, aircraft engines, or aircraft component materials or

parts. For the purposes of this exemption, "aircraft" means

aircraft used in a nonscheduled interstate federal aviation

administration certificated air carrier operation operating

under 14 C.F.R., ch. 1, pt. 135.

21. Aircraft sold to an aircraft dealer who in turn rents

or leases the aircraft if all of the following apply:

a. The aircraft is kept in the inventory of the dealer for

sale at all times.

b. The dealer reserves the right to immediately take the

aircraft from the renter or lessee when a buyer is found.

c. The renter or lessee is aware that the dealer will

immediately take the aircraft when a buyer is found.

If an aircraft exempt under this subsection is used for any

purpose other than leasing or renting, or the conditions in

paragraphs "a", "b", and "c" are not continuously met, the

dealer claiming the exemption under this subsection is liable

for the tax that would have been due except for this

subsection. The tax shall be computed upon the original

purchase price.

22. The use in this state of building materials, supplies,

or equipment, the sale or use of which is not treated as a

retail sale or a sale at retail under section 423.2,

subsection 1.

23. Exempted from the purchase price of any vehicle

subject to registration is:

a. The amount of any cash rebate which is provided by a

motor vehicle manufacturer to the purchaser of the vehicle

subject to registration so long as the rebate is applied to

the purchase price of the vehicle.

b. That in transactions, except those subject to paragraph

"c", in which tangible personal property is traded toward the

purchase price of other tangible personal property the

purchase price is only that portion of the purchase price

which is payable in money to the retailer if the following

conditions are met:

(1) The tangible personal property traded to the retailer

is the type of property normally sold in the regular course of

the retailer's business.

(2) The tangible personal property traded to the retailer

is intended by the retailer to be ultimately sold at retail or

is intended to be used by the retailer or another in the

remanufacturing of a like item.

c. In a transaction between persons, neither of which is a

retailer of vehicles subject to registration, in which a

vehicle subject to registration is traded toward the purchase

price of another vehicle subject to registration, the amount

of the trade-in value allowed on the vehicle subject to

registration traded.

Sec. 100. NEW SECTION 423.7 TITLE.

This subchapter shall be known and may be cited as the

"Uniform Sales and Use Tax Administration Act".

Sec. 101. NEW SECTION 423.8 LEGISLATIVE FINDING AND INTENT.

The general assembly finds that Iowa should enter into an

agreement with one or more states to simplify and modernize

sales and use tax administration in order to substantially

reduce the burden of tax compliance for all sellers and for

all types of commerce. It is the intent of the general

assembly that entering into this agreement will lead to

simplification and modernization of the sales and use tax law

and not to the imposition of new taxes or an increase or

decrease in the existing number of exemptions, unless such a

result is unavoidable under the terms of the agreement.

Sec. 102. NEW SECTION 423.9 AUTHORITY TO ENTER AGREEMENT AND TO REPRESENT THE STATE.

The director is authorized and directed to enter into the

streamlined sales and use tax agreement with one or more

states to simplify and modernize sales and use tax

administration in order to substantially reduce the burden of

tax compliance for all sellers and for all types of commerce.

The director is further authorized to take other actions

reasonably required to implement the provisions set forth in

this chapter. Other actions authorized by this section

include, but are not limited to, the adoption of rules and the

joint procurement, with other member states, of goods and

services in furtherance of the cooperative agreement.

The director or the director's designee is authorized to be

a member of the governing board established pursuant to the

agreement and to represent Iowa before that body.

Sec. 103. NEW SECTION 423.10 RELATIONSHIP TO STATE LAW.

Entry into the agreement by the director does not amend or

modify any law of this state. Implementation of any condition

of the agreement in this state, whether adopted before, at, or

after membership of this state in the agreement, shall be by

action of the general assembly.

Sec. 104. NEW SECTION 423.11 AGREEMENT REQUIREMENTS.

The director shall not enter into the agreement unless the

agreement requires each state to abide by the following

requirements:

1. UNIFORM STATE RATE. The agreement must set

restrictions to achieve more uniform state rates through the

following:

a. Limiting the number of state rates.

b. Limiting the application of maximums on the amount of

state tax that is due on a transaction.

c. Limiting the application of thresholds on the

application of state tax.

2. UNIFORM STANDARDS. The agreement must establish

uniform standards for the following:

a. The sourcing of transactions to taxing jurisdictions.

b. The administration of exempt sales.

c. The allowances a seller can take for bad debts.

d. Sales and use tax returns and remittances.

3. UNIFORM DEFINITIONS. The agreement must require states

to develop and adopt uniform definitions of sales and use tax

terms. The definitions must enable a state to preserve its

ability to make policy choices not inconsistent with the

uniform definitions.

4. CENTRAL REGISTRATION. The agreement must provide a

central, electronic registration system that allows a seller

to register to collect and remit sales and use taxes for all

member states.

5. NO NEXUS ATTRIBUTION. The agreement must provide that

registration with the central registration system and the

collection of sales and use taxes in the member states must

not be used as a factor in determining whether the seller has

nexus with a state for any tax.

6. LOCAL SALES AND USE TAXES. The agreement must provide

for reduction of the burdens of complying with local sales and

use taxes through the following:

a. Restricting variances between the state and local tax

bases.

b. Requiring states to administer any sales and use taxes

levied by local jurisdictions within the state so that sellers

collecting and remitting these taxes must not have to register

or file returns with, remit funds to, or be subject to

independent audits from local taxing jurisdictions.

c. Restricting the frequency of changes in the local sales

and use tax rates and setting effective dates for the

application of local jurisdictional boundary changes to local

sales and use taxes.

d. Providing notice of changes in local sales and use tax

rates and of changes in the boundaries of local taxing

jurisdictions.

7. MONETARY ALLOWANCES. The agreement must outline any

monetary allowances that are to be provided by the states to

sellers or certified service providers.

8. STATE COMPLIANCE. The agreement must require each

state to certify compliance with the terms of the agreement

prior to joining and to maintain compliance, under the laws of

the member state, with all provisions of the agreement while a

member.

9. CONSUMER PRIVACY. The agreement must require each

state to adopt a uniform policy for certified service

providers that protects the privacy of consumers and maintains

the confidentiality of tax information.

10. ADVISORY COUNCILS. The agreement must provide for the

appointment of an advisory council of private sector

representatives and an advisory council of nonmember state

representatives to consult with in the administration of the

agreement.

Sec. 105. NEW SECTION 423.12 LIMITED BINDING AND BENEFICIAL EFFECT.

1. The agreement binds and inures only to the benefit of

Iowa and the other member states. A person, other than a

member state, is not an intended beneficiary of the agreement.

Any benefit to a person other than a member state is

established by the law of Iowa and not by the terms of the

agreement.

2. A person shall not have any cause of action or defense

under the agreement or by virtue of this state's entry into

the agreement. A person may not challenge, in any action

brought under any provision of law, any action or inaction by

any department, agency, or other instrumentality of this

state, or any political subdivision of this state on the

ground that the action or inaction is inconsistent with the

agreement.

3. A law of this state, or the application of it, shall

not be declared invalid as to any such person or circumstance

on the ground that the provision or application is

inconsistent with the agreement.

Sec. 106. NEW SECTION 423.13 PURPOSE OF THIS SUBCHAPTER.

The purpose of this subchapter is to provide for the

administration and collection of sales or use tax on the part

of retailers who are not registered under the agreement and

for the collection of use tax on the part of consumers who are

obligated to pay that tax directly. Any application of the

sections of this subchapter to retailers registered under the

agreement is only by way of incorporation by reference into

subchapter VI of this chapter.

Sec. 107. NEW SECTION 423.14 SALES AND USE TAX COLLECTION.

1.

a. Sales tax, other than that described in paragraph

"c", shall be collected by sellers who are retailers or by

their agents. Sellers or their agents shall, as far as

practicable, add the sales tax, or the average equivalent

thereof, to the sales price or charge, less trade-ins allowed

and taken and when added such tax shall constitute a part of

the sales price or charge, shall be a debt from consumer or

user to seller or agent until paid, and shall be recoverable

at law in the same manner as other debts.

b. In computing the tax to be collected as the result of

any transaction, the tax computation must be carried to the

third decimal place. Whenever the third decimal place is

greater than four, the tax must be rounded up to the next

whole cent; whenever the third decimal place is four or less,

the tax must be rounded downward to a whole cent. Sellers may

elect to compute the tax due on transactions on an item or

invoice basis. Sellers are not required to use a bracket

system.

c. The tax imposed upon those sales of motor vehicle fuel

which are subject to tax and refund under chapter 452A shall

be collected by the state treasurer by way of deduction from

refunds otherwise allowable under that chapter. The treasurer

shall transfer the amount of such deductions from the motor

vehicle fuel tax fund to the special tax fund.

2. Use tax shall be collected in the following manner:

a. The tax upon the use of all vehicles subject to

registration or subject only to the issuance of a certificate

of title or the tax upon the use of manufactured housing shall

be collected by the county treasurer or the state department

of transportation pursuant to sections 423.26 and 423.27. The

county treasurer shall retain one dollar from each tax payment

collected, to be credited to the county general fund.

b. The tax upon the use of all tangible personal property

other than that enumerated in paragraph "a", which is sold by

a seller who is a retailer maintaining a place of business in

this state, or by such other retailer or agent as the director

shall authorize pursuant to section 423.30, shall be collected

by the retailer or agent and remitted to the department,

pursuant to the provisions of paragraph "e", and sections

423.24, 423.29, 423.30, 423.32, and 423.33.

c. The tax upon the use of all tangible personal property

not paid pursuant to paragraphs "a" and "b" shall be paid to

the department directly by any person using the property

within this state, pursuant to the provisions of section

423.34.

d. The tax imposed on the use of services enumerated in

section 423.5 shall be collected, remitted, and paid to the

department of revenue and finance in the same manner as use

tax on tangible personal property is collected, remitted, and

paid under this subchapter.

e. All persons obligated by paragraph "a", "b", or "d", to

collect use tax shall, as far as practicable, add that tax, or

the average equivalent thereof, to the purchase price, less

trade-ins allowed and taken, and when added the tax shall

constitute a part of the purchase price. Use tax which this

section requires to be collected by a retailer and any tax

collected pursuant to this section by a retailer shall

constitute a debt owed by the retailer to this state. Tax

which must be paid directly to the department, pursuant to

paragraph "c" or "d", is to be computed and added by the

consumer or user to the purchase price in the same manner as

this paragraph requires a seller to compute and add the tax.

The tax shall be a debt from the consumer or user to the

department until paid, and shall be recoverable at law in the

same manner as other debts.

Sec. 108. NEW SECTION 423.15 GENERAL SOURCING RULES.

All sellers obligated to collect Iowa sales or use tax

shall use the standards set out in this section to determine

where sales of products occur, excluding sales enumerated in

section 423.16. These provisions apply regardless of the

characterization of a product as tangible personal property, a

digital good, or a service, excluding telecommunications

services. This section only applies to determine a seller's

obligation to pay or collect and remit a sales or use tax with

respect to the seller's sale of a product. This section does

not affect the obligation of a purchaser or lessee to remit

tax on the use of the product to the taxing jurisdictions in

which the use occurs. A seller's obligation to collect Iowa

sales tax or Iowa use tax only occurs if the sale is sourced

to this state. The application of whether Iowa sales tax

applies to sales sourced to Iowa depends upon where the sale

is consummated by delivery.

1. Sales, excluding leases or rentals other than leases or

rentals set out in subsection 2, of products shall be sourced

as follows:

a. When the product is received by the purchaser at a

business location of the seller, the sale is sourced to that

business location.

b. When the product is not received by the purchaser at a

business location of the seller, the sale is sourced to the

location where receipt by the purchaser or the purchaser's

donee, designated as such by the purchaser, occurs, including

the location indicated by instructions for delivery to the

purchaser or donee, known to the seller.

c. When paragraphs "a" and "b" do not apply, the sale is

sourced to the location indicated by an address for the

purchaser that is available from the business records of the

seller that are maintained in the ordinary course of the

seller's business when use of this address does not constitute

bad faith.

d. When paragraphs "a", "b", and "c" do not apply, the

sale is sourced to the location indicated by an address for

the purchaser obtained during the consummation of the sale,

including the address of a purchaser's payment instrument, if

no other address is available, when use of this address does

not constitute bad faith.

e. When paragraphs "a", "b", "c", and "d" do not apply,

including the circumstance where the seller is without

sufficient information to apply the previous rules, then the

location will be determined by the address from which tangible

personal property was shipped, from which the digital good or

the computer software delivered electronically was first

available for transmission by the seller, or from which the

service was provided disregarding for these purposes any

location that merely provided the digital transfer of the

product sold.

2. The lease or rental of tangible personal property,

other than property identified in subsection 3 or section

423.16, shall be sourced as follows:

a. For a lease or rental that requires recurring periodic

payments, the first periodic payment is sourced the same as a

retail sale in accordance with the provisions of subsection 1.

Periodic payments made subsequent to the first payment are

sourced to the primary property location for each period

covered by the payment. The primary property location shall

be as indicated by an address for the property provided by the

lessee that is available to the lessor from its records

maintained in the ordinary course of business, when use of

this address does not constitute bad faith. The property

location shall not be altered by intermittent use at different

locations, such as use of business property that accompanies

employees on business trips and service calls.

b. For a lease or rental that does not require recurring

periodic payments, the payment is sourced the same as a retail

sale in accordance with the provisions of subsection 1.

c. This subsection does not affect the imposition or

computation of sales or use tax on leases or rentals based on

a lump sum or accelerated basis, or on the acquisition of

property for lease.

3. The retail sale, including lease or rental, of

transportation equipment shall be sourced the same as a retail

sale in accordance with the provisions of subsection 1,

notwithstanding the exclusion of lease or rental in that

subsection. "Transportation equipment" means any of the

following:

a. Locomotives or railcars that are utilized for the

carriage of persons or property in interstate commerce.

b. Trucks and truck-tractors with a gross vehicle weight

rating of ten thousand one pounds or greater, trailers,

semitrailers, or passenger buses that meet both of the

following requirements:

(1) Are registered through the international registration

plan.

(2) Are operated under authority of a carrier authorized

and certificated by the United States department of

transportation or another federal authority to engage in the

carriage of persons or property in interstate commerce.

c. Aircraft that are operated by air carriers authorized

and certificated by the United States department of

transportation or another federal or a foreign authority to

engage in the carriage of persons or property in interstate or

foreign commerce.

d. Containers designed for use on and component parts

attached or secured on the items set forth in paragraphs "a"

through "c".

Sec. 109. NEW SECTION 423.16 TRANSACTIONS TO WHICH THE GENERAL SOURCING RULES DO NOT APPLY.

Section 423.15 does not apply to sales or use taxes levied

on the following:

1. The retail sale or transfer of watercraft, modular

homes, manufactured housing, or mobile homes, and the retail

sale, excluding lease or rental, of motor vehicles, trailers,

semitrailers, or aircraft that do not qualify as

transportation equipment, as defined in section 423.15,

subsection 3.

2. The lease or rental of motor vehicles, trailers,

semitrailers, or aircraft that do not qualify as

transportation equipment, as defined in section 423.15,

subsection 3, which shall be sourced in accordance with

section 423.17.

3. Transactions to which the multiple points use exemption

is applicable, which shall be sourced in accordance with

section 423.18.

4. Transactions to which direct mail sourcing is

applicable, which shall be sourced in accordance with section

423.19.

5. Telecommunications services, as set out in section

423.20, which shall be sourced in accordance with section

423.20, subsection 2.

Sec. 110. NEW SECTION 423.17 SOURCING RULES FOR VARIOUS TYPES OF LEASED OR RENTED EQUIPMENT WHICH IS NOT TRANSPORTATION EQUIPMENT.

The lease or rental of motor vehicles, trailers,

semitrailers, or aircraft that do not qualify as

transportation equipment, as defined in section 423.15,

subsection 3, shall be sourced as follows:

1. For a lease or rental that requires recurring periodic

payments, each periodic payment is sourced to the primary

property location. The primary property location shall be as

indicated by an address for the property provided by the

lessee that is available to the lessor from its records

maintained in the ordinary course of business, when use of

this address does not constitute bad faith. This location

shall not be altered by intermittent use at different

locations.

2. For a lease or rental that does not require recurring

periodic payments, the payment is sourced the same as a retail

sale in accordance with the provisions of section 423.15,

subsection 1.

3. This section does not affect the imposition or

computation of sales or use tax on leases or rentals based on

a lump sum or accelerated basis, or on the acquisition of

property for lease.

Sec. 111. NEW SECTION 423.18 MULTIPLE POINTS OF USE EXEMPTION FORMS.

A business purchaser that is not a holder of a direct pay

tax permit pursuant to section 423.36 that knows at the time

of its purchase of a digital good, computer software delivered

electronically, or a service that the digital good, computer

software delivered electronically, or service will be

concurrently available for use in more than one jurisdiction

shall deliver to the seller in conjunction with its purchase a

"multiple points of use" or "MPU" exemption form disclosing

this fact.

1. Upon receipt of the MPU exemption form, the seller is

relieved of all obligation to collect, pay, or remit the

applicable tax and the purchaser shall be obligated to

collect, pay, or remit the applicable tax on a direct pay

basis.

2. A purchaser delivering the MPU exemption form may use

any reasonable, but consistent and uniform, method of

apportionment that is supported by the purchaser's business

records as they exist at the time of the consummation of the

sale.

3. The MPU exemption form will remain in effect for all

future sales by the seller to the purchaser except as to the

subsequent sale's specific apportionment that is governed by

the principle of subsection 2 and the facts existing at the

time of the sale until it is revoked in writing.

4. A holder of a direct pay tax permit under section

423.36 shall not be required to deliver an MPU exemption form

to the seller. A direct pay tax permit holder shall follow

the provisions of subsection 2 in apportioning the tax due on

a digital good, computer software delivered electronically, or

service that will be concurrently available for use in more

than one jurisdiction.

Sec. 112. NEW SECTION 423.19 DIRECT MAIL SOURCING.

1. Notwithstanding section 423.15, a purchaser of direct

mail that is not a holder of a direct pay tax permit pursuant

to section 423.36 shall provide to the seller in conjunction

with the purchase either a direct mail form or information to

show the jurisdictions to which the direct mail is delivered

to recipients.

a. Upon receipt of the direct mail form, the seller is

relieved of all obligations to collect, pay, or remit the

applicable tax and the purchaser is obligated to pay or remit

the applicable tax on a direct pay basis. A direct mail form

shall remain in effect for all future sales of direct mail by

the seller to the purchaser until it is revoked in writing.

b. Upon receipt of information from the purchaser showing

the jurisdictions to which the direct mail is delivered to

recipients, the seller shall collect the tax according to the

delivery information provided by the purchaser. In the

absence of bad faith, the seller is relieved of any further

obligation to collect tax on any transaction where the seller

has collected tax pursuant to the delivery information

provided by the purchaser.

2. If the purchaser of direct mail does not have a direct

pay tax permit and does not provide the seller with either a

direct mail form or delivery information, as required by

subsection 1, the seller shall collect the tax according to

section 423.15, subsection 1, paragraph "e". Nothing in this

subsection shall limit a purchaser's obligation for sales or

use tax to any state to which the direct mail is delivered.

3. If a purchaser of direct mail provides the seller with

documentation of direct pay authority, the purchaser shall not

be required to provide a direct mail form or delivery

information to the seller.

Sec. 113. NEW SECTION 423.20 TELECOMMUNICATIONS SERVICE SOURCING.

1. As used in this section:

a. "Air-to-ground radiotelephone service" means a radio

service, as that term is used in 47 C.F.R. § 22.99, in which

common carriers are authorized to offer and provide radio

telecommunications service for hire to subscribers in

aircraft.

b. "Call-by-call basis" means any method of charging for

the telecommunications service where the price is measured by

individual calls.

c. "Communications channel" means a physical or virtual

path of communications over which signals are transmitted

between or among customer channel termination points.

d. "Customer" means the person or entity that contracts

with the seller of the telecommunications service. If the end

user of the telecommunications service is not the contracting

party, the end user of the telecommunications service is the

customer of the telecommunications service, but this sentence

only applies for the purpose of sourcing sales of the

telecommunications service under this section. "Customer"

does not include a reseller of a telecommunications service or

for mobile telecommunications service of a serving carrier

under an agreement to serve the customer outside the home

service provider's licensed service area.

e. "Customer channel termination point" means the location

where the customer either inputs or receives the

communications.

f. "End user" means the person who utilizes the

telecommunications service. In the case of an entity, "end

user" means the individual who utilizes the service on behalf

of the entity.

g. "Home service provider" means the same as that term is

defined in the federal Mobile Telecommunications Sourcing Act,

Pub. L. No. 106-252, 4 U.S.C. § 124(5).

h. "Mobile telecommunications service" means the same as

that term is defined in federal Mobile Telecommunications

Sourcing Act, Pub. L. No. 106-252, 4 U.S.C. § 124(7).

i. "Place of primary use" means the street address

representative of where the customer's use of the

telecommunications service primarily occurs, which must be the

residential street address or the primary business street

address of the customer. In the case of mobile

telecommunications service, "place of primary use" must be

within the licensed service area of the home service provider.

j. "Postpaid calling service" means the telecommunications

service obtained by making a payment on a call-by-call basis

either through the use of a credit card or payment mechanism

such as a bank card, travel card, credit card, or debit card,

or by charge made to a telephone number which is not

associated with the origination or termination of the

telecommunications service. A "postpaid calling service"

includes a telecommunications service that would be a prepaid

calling service except it is not exclusively a

telecommunications service.

k. "Prepaid calling service" means the right to access

exclusively telecommunications services, which must be paid

for in advance and which enables the origination of calls

using an access number or authorization code, whether manually

or electronically dialed, and that is sold in predetermined

units or dollars of which the amount declines with use in a

known amount.

l. "Private communication service" means a

telecommunications service that entitles the customer to

exclusive or priority use of a communications channel or group

of channels between or among termination points, regardless of

the manner in which such channel or channels are connected,

and includes switching capacity, extension lines, stations,

and any other associated services that are provided in

connection with the use of such channel or channels.

m. "Service address" means one of the following:

(1) The location of the telecommunications equipment to

which a customer's call is charged and from which the call

originates or terminates, regardless of where the call is

billed or paid.

(2) If the location in subparagraph (1) is not known,

"service address" means the origination point of the signal of

the telecommunications service first identified by either the

seller's telecommunications system or in information received

by the seller from its service provider, where the system used

to transport such signals is not that of the seller.

(3) If the locations in subparagraphs (1) and (2) are not

known, the "service address" means the location of the

customer's place of primary use.

2. Sales of telecommunications services shall be sourced

in the following manner:

a. Except for the defined telecommunications services in

paragraph "c", the sale of telecommunications services sold on

a call-by-call basis shall be sourced to one of the following:

(1) Each level of taxing jurisdiction where the call

originates and terminates in that jurisdiction.

(2) Each level of taxing jurisdiction where the call

either originates or terminates and in which the service

address is also located.

b. Except for the defined telecommunications services in

paragraph "c", a sale of telecommunications services sold on a

basis other than a call-by-call basis is sourced to the

customer's place of primary use.

c. Sale of the following telecommunications services shall

be sourced to each level of taxing jurisdiction as follows:

(1) A sale of mobile telecommunications services other

than air-to-ground radiotelephone service or prepaid calling

service is sourced to the customer's place of primary use as

required by the federal Mobile Telecommunications Sourcing

Act.

(2) A sale of postpaid calling service is sourced to the

origination point of the telecommunications signal as first

identified by either of the following:

(a) The seller's telecommunications system.

(b) Information received by the seller from its service

provider, where the system used to transport such signals is

not that of the seller.

(3) A sale of prepaid calling service is sourced in

accordance with section 423.15. However, in the case of a

sale of mobile telecommunications services that is a prepaid

telecommunications service, the rule provided in section

423.15, subsection 1, paragraph "e", shall include as an

option the location associated with the mobile telephone

number.

(4) A sale of a private telecommunications service is

sourced as follows:

(a) Service for a separate charge related to a customer

channel termination point is sourced to each level of

jurisdiction in which such customer channel termination point

is located.

(b) Service where all customer termination points are

located entirely within one jurisdiction or level of

jurisdiction is sourced in such jurisdiction in which the

customer channel termination points are located.

(c) Service for segments of a channel between two customer

channel termination points located in different jurisdictions

and which segments of a channel are separately charged is

sourced fifty percent in each level of jurisdiction in which

the customer channel termination points are located.

(d) Service for segments of a channel located in more than

one jurisdiction or levels of jurisdiction and which segments

are not separately billed is sourced in each jurisdiction

based on the percentage determined by dividing the number of

customer channel termination points in such jurisdiction by

the total number of customer channel termination points.

Sec. 114. NEW SECTION 423.21 BAD DEBT DEDUCTIONS.

1. For the purposes of this section, "bad debt" means an

amount properly calculated pursuant to section 166 of the

Internal Revenue Code then adjusted to exclude financing

charges or interest, sales or use taxes charged on the

purchase price, uncollectible amounts on property that remain

in the possession of the seller until the full purchase price

is paid, expenses incurred in attempting to collect any debt,

and repossessed property.

2. In computing the amount of tax due, a seller may deduct

bad debts from the total amount upon which the tax is

calculated for any return. Any deduction taken or refund paid

which is attributed to bad debts shall not include interest.

3. A seller may deduct bad debts on the return for the

period during which the bad debt is written off as

uncollectible in the seller's books and records and is

eligible to be deducted for federal income tax purposes. For

purposes of this subsection, a seller who is not required to

file federal income tax returns may deduct a bad debt on a

return filed for the period in which the bad debt is written

off as uncollectible in the seller's books and records and

would be eligible for a bad debt deduction for federal income

tax purposes if the seller were required to file a federal

income tax return.

4. If a deduction is taken for a bad debt and the seller

subsequently collects the debt in whole or in part, the tax on

the amount so collected must be paid and reported on the

return filed for the period in which the collection is made.

5. A seller may obtain a refund of tax on any amount of

bad debt that exceeds the amount of taxable sales within the

period allowed for refund claims by section 423.47. However,

the period allowed for refund claims shall be measured from

the due date of the return on which the bad debt could first

be claimed.

6. For the purposes of computing a bad debt deduction or

reporting a payment received on a previously claimed bad debt,

any payments made on a debt or account shall be applied first

to the price of the property or service and tax thereon,

proportionally, and secondly to interest, service charges, and

any other charges.

Sec. 115. NEW SECTION 423.22 TAXATION IN ANOTHER STATE.

If any person who causes tangible personal property to be

brought into this state or who uses in this state services

enumerated in section 423.2 has already paid a tax in another

state in respect to the sale or use of the property or the

performance of the service, or an occupation tax in respect to

the property or service, in an amount less than the tax

imposed by subchapter II or III, the provisions of those

subchapters shall apply, but at a rate measured by the

difference only between the rate fixed by subchapter II or III

and the rate by which the previous tax on the sale or use, or

the occupation tax, was computed. If the tax imposed and paid

in the other state is equal to or more than the tax imposed by

those subchapters, then a tax is not due in this state on the

personal property or service.

Sec. 116. NEW SECTION 423.23 SELLERS' AGREEMENTS.

Agreements between competing sellers, or the adoption of

appropriate rules and regulations by organizations or

associations of sellers to provide uniform methods for adding

sales or use tax or the average equivalent thereof, and which

do not involve price-fixing agreements otherwise unlawful, are

expressly authorized and shall be held not in violation of

chapter 553 or other antitrust laws of this state. The

director shall cooperate with sellers, organizations, or

associations in formulating agreements and rules.

Sec. 117. NEW SECTION 423.24 ABSORBING TAX PROHIBITED.

A seller shall not advertise or hold out or state to the

public or to any purchaser, consumer, or user, directly or

indirectly, that the taxes or any parts thereof imposed by

subchapter II or III will be assumed or absorbed by the seller

or the taxes will not be added to the sales price of the

property sold, or if added that the taxes or any part thereof

will be refunded. Any person violating any of the provisions

of this section within this state is guilty of a simple

misdemeanor.

Sec. 118. NEW SECTION 423.25 DIRECTOR'S POWER TO ADOPT RULES.

The director shall have the power to adopt rules for adding

the taxes imposed by subchapters II and III, or the average

equivalents thereof, by providing different methods applying

uniformly to retailers within the same general classification

for the purpose of enabling the retailers to add and collect,

as far as practicable, the amounts of those taxes.

Sec. 119. NEW SECTION 423.26 VEHICLES SUBJECT TO REGISTRATION OR ONLY TO THE ISSUANCE OF TITLE — MANUFACTURED HOUSING.

The use tax imposed upon the use of vehicles subject to

registration or subject only to the issuance of a certificate

of title or imposed upon the use of manufactured housing shall

be paid by the owner of the vehicle or of the manufactured

housing to the county treasurer or the state department of

transportation from whom the registration receipt or

certificate of title is obtained. A registration receipt for

a vehicle subject to registration or certificate of title

shall not be issued until the tax has been paid. The county

treasurer or the state department of transportation shall

require every applicant for a registration receipt for a

vehicle subject to registration or certificate of title to

supply information as the county treasurer or the director

deems necessary as to the time of purchase, the purchase

price, installed purchase price, and other information

relative to the purchase of the vehicle or manufactured

housing. On or before the tenth day of each month, the county

treasurer or the state department of transportation shall

remit to the department the amount of the taxes collected

during the preceding month.

A person who willfully makes a false statement in regard to

the purchase price of a vehicle subject to taxation under this

section is guilty of a fraudulent practice. A person who

willfully makes a false statement in regard to the purchase

price of such a vehicle with the intent to evade the payment

of tax shall be assessed a penalty of seventy-five percent of

the amount of tax unpaid and required to be paid on the actual

purchase price less trade-in allowance.

Sec. 120. NEW SECTION 423.27 MOTOR VEHICLE LEASE TAX.

1. The use tax imposed upon the use of leased vehicles

subject to registration under chapter 321, with gross vehicle

weight ratings of less than sixteen thousand pounds, excluding

motorcycles and motorized bicycles, which are leased by a

lessor licensed pursuant to chapter 321F for a period of

twelve months or more shall be paid by the owner of the

vehicle to the county treasurer or state department of

transportation from whom the registration receipt or

certificate of title is obtained. A registration receipt for

a vehicle subject to registration or issuance of a certificate

of title shall not be issued until the tax is paid in the

initial instance. Tax on the lease transaction that does not

require titling or registration of the vehicle shall be

remitted to the department. Tax and the reporting of tax due

to the department shall be remitted on or before fifteen days

from the last day of the month that the vehicle lease tax

becomes due. Failure to timely report or remit any of the tax

when due shall result in a penalty and interest being imposed

on the tax due pursuant to section 423.40, subsection 1, and

section 423.42, subsection 1.

2. The amount subject to tax shall be computed on each

separate lease transaction by taking the total of the lease

payments, plus the down payment, and excluding all of the

following:

a. Title fee.

b. Registration fees.

c. Vehicle lease tax pursuant to this section.

d. Federal excise taxes attributable to the sale of the

vehicle to the owner or to the lease of the vehicle by the

owner.

e. Optional service or warranty contracts subject to tax

pursuant to section 423.2, subsection 1.

f. Insurance.

g. Manufacturer's rebate.

h. Refundable deposit.

i. Finance charges, if any, on items listed in paragraphs

"a" through "h".

If any or all of the items in paragraphs "a" through "i"

are excluded from the taxable lease price, the owner shall

maintain adequate records of the amounts of those items. If

the parties to a lease enter into an agreement providing that

the tax imposed under this statute is to be paid by the lessee

or included in the monthly lease payments to be paid by the

lessee, the total cost of the tax shall not be included in the

computation of lease price for the purpose of taxation under

this section. The county treasurer, the state department of

transportation, or the department of revenue and finance shall

require every applicant for a registration receipt for a

vehicle subject to tax under this section to supply

information as the county treasurer or director deems

necessary as to the date of the lease transaction, the lease

price, and other information relative to the lease of the

vehicle.

3. On or before the tenth day of each month, the county

treasurer or the state department of transportation shall

remit to the department the amount of the taxes collected

during the preceding month.

4. If the lease is terminated prior to the termination

date contained in the lease agreement, no refund shall be

allowed for tax previously paid under this section, except as

provided in section 322G.4.

Sec. 121. NEW SECTION 423.28 SALES TAX REPORT — DEDUCTION.

Motor vehicle or trailer dealers, in making their reports

and returns to the department for the purpose of paying the

sales tax, shall be permitted to deduct all sales prices from

retail sales of vehicles subject to registration or subject

only to the issuance of a certificate of title. Sales prices

from sales of vehicles subject to registration or subject only

to the issuance of a certificate of title are exempted from

the sales tax, but, if required by the director, the sales

prices shall be included in the returns made by motor vehicle

or trailer dealers under subchapter II, and proper deductions

taken pursuant to this section.

Sec. 122. NEW SECTION 423.29 COLLECTIONS BY SELLERS.

Every seller who is a retailer and who is making taxable

sales of tangible personal property in Iowa shall, at the time

of selling the property, collect the sales tax. Every seller

who is a retailer maintaining a place of business in this

state and selling tangible personal property for use in Iowa

shall, at the time of making the sale, whether within or

without the state, collect the use tax. Sellers required to

collect sales or use tax shall give to any purchaser a receipt

for the tax collected in the manner and form prescribed by the

director.

Every seller who is a retailer furnishing taxable services

in Iowa and every seller who is a retailer maintaining a place

of business in this state and furnishing taxable services in

Iowa or services outside Iowa if the product or result of the

service is used in Iowa shall be subject to the provisions of

the preceding paragraph.

Sec. 123. NEW SECTION 423.30 FOREIGN SELLERS NOT REGISTERED UNDER THE AGREEMENT.

The director may, upon application, authorize the

collection of the use tax by any seller who is a retailer not

maintaining a place of business within this state and not

registered under the agreement, who, to the satisfaction of

the director, furnishes adequate security to ensure collection

and payment of the tax. Such sellers shall be issued, without

charge, permits to collect tax subject to any regulations

which the director shall prescribe. When so authorized, it

shall be the duty of foreign sellers to collect the tax upon

all tangible personal property sold, to the retailer's

knowledge, for use within this state, in the same manner and

subject to the same requirements as a retailer maintaining a

place of business within this state. The authority and permit

may be canceled when, at any time, the director considers the

security inadequate, or that tax can more effectively be

collected from the person using property in this state.

The discretionary power granted in this section is extended

to apply in the case of foreign retailers furnishing services

enumerated in section 423.2.

Sec. 124. NEW SECTION 423.31 FILING OF SALES TAX RETURNS AND PAYMENT OF SALES TAX.

1. Each person subject to this section and section 423.36

and in accordance with the provisions of this section and

section 423.36 shall, on or before the last day of the month

following the close of each calendar quarter during which such

person is or has become or ceased being subject to the

provisions of this section and section 423.36, make, sign, and

file a return for the calendar quarter in the form as may be

required. Returns shall show information relating to sales

prices including goods, wares, and services converted to the

use of such person, the amounts of sales prices excluded and

exempt from the tax, the amounts of sales prices subject to

tax, a calculation of tax due, and any other information for

the period covered by the return as may be required. Returns

shall be signed by the retailer or the retailer's authorized

agent and must be certified by the retailer to be correct in

accordance with forms and rules prescribed by the director.

2. Persons required to file, or committed to file by

reason of voluntary action or by order of the department,

deposits of taxes due under this subchapter shall be entitled

to take credit against the total quarterly amount of tax due

such amount as shall have been deposited by such persons

during that calendar quarter. The balance remaining due after

such credit for deposits shall be entered on the return.

However, such person may be granted an extension of time not

exceeding thirty days for filing the quarterly return, upon a

proper showing of necessity. If an extension is granted, such

person shall have paid by the twentieth day of the month

following the close of such quarter ninety percent of the

estimated tax due.

3. The sales tax forms prescribed by the director shall be

referred to as "retailers tax deposit". Deposit forms shall

be signed by the retailer or the retailer's duly authorized

agent, and shall be duly certified by the retailer or agent to

be correct. The director may authorize incorporated banks and

trust companies or other depositories authorized by law which

are depositories or financial agents of the United States, or

of this state, to receive any sales tax imposed under this

chapter, in the manner, at the times, and under the conditions

the director prescribes. The director shall prescribe the

manner, times, and conditions under which the receipt of the

tax by those depositories is to be treated as payment of the

tax to the department.

4. Every retailer at the time of making any return

required by this section shall compute and pay to the

department the tax due for the preceding period. The tax on

sales prices from the sale or rental of tangible personal

property under a consumer rental purchase agreement as defined

in section 537.3604, subsection 8, is payable in the tax

period of receipt.

5. Upon making application and receiving approval from the

director, a parent corporation and its affiliated corporations

that make retail sales of tangible personal property or

taxable enumerated services may make deposits and file a

consolidated sales tax return for the affiliated group,

pursuant to rules adopted by the director. A parent

corporation and each affiliate corporation that files a

consolidated return are jointly and severally liable for all

tax, penalty, and interest found due for the tax period for

which a consolidated return is filed or required to be filed.

A business required to file a consolidated sales tax return

shall file a form entitled "schedule of consolidated business

locations" with its quarterly sales tax return that shows the

taxpayer's consolidated permit number, the permit number for

each Iowa business location, the state sales tax amount by

business location, and the amount of state sales tax due on

goods consumed that are not assigned to a specific business

location. Consolidated quarterly sales tax returns that are

not accompanied by the schedule of consolidated business

locations form are considered incomplete and are subject to

penalty under section 421.27.

6. If necessary or advisable in order to insure the

payment of the tax, the director may require returns and

payment of the tax to be made for other than quarterly

periods, the provisions of this section, or other provision to

the contrary notwithstanding.

Sec. 125. NEW SECTION 423.32 FILING OF USE TAX RETURNS AND PAYMENT OF USE TAX.

1. A retailer maintaining a place of business in this

state who is required to collect or a user who is required to

pay the use tax or a foreign retailer authorized, pursuant to

section 423.30, to collect the use tax, shall remit to the

department the amount of tax on or before the last day of the

month following each calendar quarterly period. However, a

retailer who collects or owes more than fifteen hundred

dollars in use taxes in a month shall deposit with the

department or in a depository authorized by law and designated

by the director, the amount collected or owed, with a deposit

form for the month as prescribed by the director.

a. The deposit form is due on or before the twentieth day

of the month following the month of collection, except a

deposit is not required for the third month of the calendar

quarter, and the total quarterly amount, less the amounts

deposited for the first two months of the quarter, is due with

the quarterly report on the last day of the month following

the month of collection. At that time, the retailer shall

file with the department a return for the preceding quarterly

period in the form prescribed by the director showing the

purchase price of the tangible personal property sold by the

retailer during the preceding quarterly period, the use of

which is subject to the use tax imposed by this chapter, and

other information the director deems necessary for the proper

administration of the use tax.

b. The return shall be accompanied by a remittance of the

use tax for the period covered by the return. If necessary in

order to ensure payment to the state of the tax, the director

may in any or all cases require returns and payments to be

made for other than quarterly periods. The director, upon

request and a proper showing of necessity, may grant an

extension of time not to exceed thirty days for making any

return and payment. Returns shall be signed, in accordance

with forms and rules prescribed by the director, by the

retailer or the retailer's authorized agent, and shall be

certified by the retailer or agent to be correct.

2. If it is reasonably expected, as determined by rules

prescribed by the director, that a retailer's annual sales or

use tax liability will not exceed one hundred twenty dollars

for a calendar year, the retailer may request and the director

may grant permission to the retailer, in lieu of the quarterly

filing and remitting requirements set out elsewhere in this

section, to file the return required by and remit the sales or

use tax due under this section on a calendar-year basis. The

return and tax are due and payable no later than January 31

following each calendar year in which the retailer carries on

business.

3. The director, in cooperation with the department of

management, may periodically change the filing and remittance

thresholds by administrative rule if in the best interests of

the state and taxpayer to do so.

Sec. 126. NEW SECTION 423.33 LIABILITY OF PERSONS OTHER THAN RETAILERS FOR PAYMENT OF SALES OR USE TAX.

1. LIABILITY OF PURCHASER FOR SALES TAX. If a purchaser

fails to pay sales tax to the retailer required to collect the

tax, then in addition to all of the rights, obligations, and

remedies provided, the tax is payable by the purchaser

directly to the department, and sections 423.31, 423.32,

423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 apply to

the purchaser. For failure to pay, the retailer and purchaser

are liable, unless the circumstances described in section

421.60, subsection 2, paragraph "m", or section 423.45,

subsection 4, paragraph "b" or "e", or subsection 5, paragraph

"c" or "e", are applicable.

2. IMMEDIATE SUCCESSOR LIABILITY FOR SALES OR USE TAX. If

a retailer sells the retailer's business or stock of goods or

quits the business, the retailer shall prepare a final return

and pay all sales or use tax due within the time required by

law. The immediate successor to the retailer, if any, shall

withhold a sufficient portion of the purchase price, in money

or money's worth, to pay the amount of delinquent tax,

interest, or penalty due and unpaid. If the immediate

successor of the business or stock of goods intentionally

fails to withhold the amount due from the purchase price as

provided in this subsection, the immediate successor is

personally liable for the payment of delinquent taxes,

interest, and penalty accrued and unpaid on account of the

operation of the business by the immediate former retailer,

except when the purchase is made in good faith as provided in

section 421.28. However, a person foreclosing on a valid

security interest or retaking possession of premises under a

valid lease is not an "immediate successor" for purposes of

this section. The department may waive the liability of the

immediate successor under this subsection if the immediate

successor exercised good faith in establishing the amount of

the previous liability.

3. EVENT SPONSOR'S LIABILITY FOR SALES TAX. A person

sponsoring a flea market or a craft, antique, coin, or stamp

show or similar event shall obtain from every retailer selling

tangible personal property or taxable services at the event

proof that the retailer possesses a valid sales tax permit or

secure from the retailer a statement, taken in good faith,

that property or services offered for sale are not subject to

sales tax. Failure to do so renders a sponsor of the event

liable for payment of any sales tax, interest, and penalty due

and owing from any retailer selling property or services at

the event. Sections 423.31, 423.32, 423.37, 423.38, 423.39,

423.40, 423.41, and 423.42 apply to the sponsors. For

purposes of this subsection, a person sponsoring a flea market

or a craft, antique, coin, or stamp show or similar event does

not include an organization which sponsors an event less than

three times a year or a state, county, or district

agricultural fair.

Sec. 127. NEW SECTION 423.34 LIABILITY OF USER.

Any person who uses any property or services enumerated in

section 423.2 upon which the use tax has not been paid, either

to the county treasurer or to a retailer or direct to the

department as required by this subchapter, shall be liable for

the payment of tax, and shall on or before the last day of the

month next succeeding each quarterly period pay the use tax

upon all property or services used by the person during the

preceding quarterly period in the manner and accompanied by

such returns as the director shall prescribe. All of the

provisions of sections 423.32 and 423.33 with reference to the

returns and payments shall be applicable to the returns and

payments required by this section.

Sec. 128. NEW SECTION 423.35 POSTING OF BOND TO SECURE PAYMENT.

The director may, when necessary and advisable in order to

secure the collection of the sales or use tax, authorize any

person subject to either tax, and any retailer required or

authorized to collect those taxes pursuant to the provisions

of section 423.14, to file with the department a bond, issued

by a surety company authorized to transact business in this

state and approved by the insurance commissioner as to

solvency and responsibility, in an amount as the director may

fix, to secure the payment of any tax, interest, or penalties

due or which may become due from such person. In lieu of a

bond, securities approved by the director, in an amount which

the director may prescribe, may be deposited with the

department, which securities shall be kept in the custody of

the department and may be sold by the director at public or

private sale, without notice to the depositor, if it becomes

necessary to do so in order to recover any tax, interest, or

penalties due. Upon the sale, the surplus, if any, above the

amounts due under this chapter shall be returned to the person

who deposited the securities.

Sec. 129. NEW SECTION 423.36 PERMITS REQUIRED TO COLLECT SALES OR USE TAX — APPLICATIONS — REVOCATION.

1. A person shall not engage in or transact business as a

retailer making taxable sales of tangible personal property or

furnishing services within this state or as a retailer making

taxable sales of tangible personal property or furnishing

services for use within this state, unless a permit has been

issued to the retailer under this section, except as provided

in subsection 6. Every person desiring to engage in or

transact business as a retailer shall file with the department

an application for a permit to collect sales or use tax.

Every application for a sales or use tax permit shall be made

upon a form prescribed by the director and shall set forth any

information the director may require. The application shall

be signed by an owner of the business if a natural person; in

the case of a retailer which is an association or partnership,

by a member or partner; and in the case of a retailer which is

a corporation, by an executive officer or some person

specifically authorized by the corporation to sign the

application, to which shall be attached the written evidence

of the person's authority.

2. To collect sales or use tax, the applicant must have a

permit for each place of business in the state of Iowa. The

department may deny a permit to an applicant who is

substantially delinquent in paying a tax due, or the interest

or penalty on the tax, administered by the department at the

time of application. If the applicant is a partnership, a

permit may be denied if a partner is substantially delinquent

in paying any delinquent tax, penalty, or interest. If the

applicant is a corporation, a permit may be denied if any

officer having a substantial legal or equitable interest in

the ownership of the corporation owes any delinquent tax,

penalty, or interest.

3. The department shall grant and issue to each applicant

a permit for each place of business in this state where sales

or use tax is collected. A permit is not assignable and is

valid only for the person in whose name it is issued and for

the transaction of business at the place designated or at a

place of relocation within the state if the ownership remains

the same.

If an applicant is making sales outside Iowa for use in

this state or furnishing services outside Iowa, the product or

result of which will be used in this state, that applicant

shall be issued one use tax permit by the department

applicable to these out-of-state sales or services.

4. Permits issued under this section are valid and

effective until revoked by the department.

5. If the holder of a permit fails to comply with any of

the provisions of this subchapter or of subchapter II or III

or any order or rule of the department adopted under those

subchapters or is substantially delinquent in the payment of a

tax administered by the department or the interest or penalty

on the tax, or if the person is a corporation and if any

officer having a substantial legal or equitable interest in

the ownership of the corporation owes any delinquent tax of

the permit-holding corporation, or interest or penalty on the

tax, administered by the department, the director may revoke

the permit. The director shall send notice by mail to a

permit holder informing that person of the director's intent

to revoke the permit and of the permit holder's right to a

hearing on the matter. If the permit holder petitions the

director for a hearing on the proposed revocation, after

giving ten days' notice of the time and place of the hearing

in accordance with section 17A.18, subsection 3, the matter

may be heard and a decision rendered. The director may

restore permits after revocation. The director shall adopt

rules setting forth the period of time a retailer must wait

before a permit may be restored or a new permit may be issued.

The waiting period shall not exceed ninety days from the date

of the revocation of the permit.

6. Sellers who are not regularly engaged in selling at

retail and do not have a permanent place of business, but who

are temporarily engaged in selling from trucks, portable

roadside stands, concessionaires at state, county, district,

or local fairs, carnivals, or the like, shall report and remit

the sales tax on a temporary basis, under rules the director

shall provide for the efficient collection of the sales tax.

This subsection applies to sellers who are temporarily engaged

in furnishing services.

Persons engaged in selling tangible personal property or

furnishing services shall not be required to obtain or retain

a sales tax permit for a place of business at which taxable

sales of tangible personal property or taxable performance of

services will not occur.

7. The provisions of subsection 1, dealing with the lawful

right of a retailer to transact business, as applicable, apply

to persons having receipts from furnishing services enumerated

in section 423.2, except that a person holding a permit

pursuant to subsection 1 shall not be required to obtain any

separate sales tax permit for the purpose of engaging in

business involving the services.

8.

a. Except as provided in paragraph "b", purchasers,

users, and consumers of tangible personal property or

enumerated services taxed pursuant to subchapter II or III of

this chapter or chapters 423B and 423E may be authorized,

pursuant to rules adopted by the director, to remit tax owed

directly to the department instead of the tax being collected

and paid by the seller. To qualify for a direct pay tax

permit, the purchaser, user, or consumer must accrue a tax

liability of more than four thousand dollars in tax under

subchapters II and III in a semimonthly period and make

deposits and file returns pursuant to section 423.31. This

authority shall not be granted or exercised except upon

application to the director and then only after issuance by

the director of a direct pay tax permit.

b. The granting of a direct pay tax permit is not

authorized for any of the following:

(1) Taxes imposed on the sales, furnishing, or service of

gas, electricity, water, heat, pay television service, and

communication service.

(2) Taxes imposed under sections 423.26 and 423.27 and

chapter 423C.

Sec. 130. NEW SECTION 423.37 FAILURE TO FILE SALES OR USE TAX RETURNS — INCORRECT RETURNS.

1. As soon as practicable after a return is filed and in

any event within three years after the return is filed, the

department shall examine it, assess and determine the tax due

if the return is found to be incorrect, and give notice to the

person liable for the tax of the assessment and determination

as provided in subsection 2. The period for the examination

and determination of the correct amount of tax is unlimited in

the case of a false or fraudulent return made with the intent

to evade tax or in the case of a failure to file a return.

2. If a return required by this subchapter is not filed,

or if a return when filed is incorrect or insufficient and the

maker fails to file a corrected or sufficient return within

twenty days after the same is required by notice from the

department, the department shall determine the amount of tax

due from information as the department may be able to obtain

and, if necessary, may estimate the tax on the basis of

external indices, such as number of employees of the person

concerned, rentals paid by the person, stock on hand, or other

factors. The department shall give notice of the

determination to the person liable for the tax. The

determination shall fix the tax unless the person against whom

it is assessed shall, within sixty days after the giving of

notice of the determination, apply to the director for a

hearing or unless the taxpayer contests the determination by

paying the tax, interest, and penalty and timely filing a

claim for refund. At the hearing evidence may be offered to

support the determination or to prove that it is incorrect.

After the hearing the director shall give notice of the

decision to the person liable for the tax.

3. The three-year period of limitation provided in

subsection 1 may be extended by a taxpayer by signing a waiver

agreement form to be provided by the department. The

agreement shall stipulate the period of extension and the tax

period to which the extension applies. The agreement shall

also provide that a claim for refund may be filed by the

taxpayer at any time during the period of extension.

Sec. 131. NEW SECTION 423.38 JUDICIAL REVIEW.

1. Judicial review of actions of the director may be

sought in accordance with the terms of the Iowa administrative

procedure Act.

2. For cause and upon a showing by the director that

collection of the tax in dispute is in doubt, the court may

order the petitioner to file with the clerk a bond for the use

of the respondent, with sureties approved by the clerk, in the

amount of tax appealed from, conditioned that the petitioner

shall perform the orders of the court.

3. An appeal may be taken by the taxpayer or the director

to the supreme court of this state irrespective of the amount

involved.

Sec. 132. NEW SECTION 423.39 SERVICE OF NOTICES.

1. A notice authorized or required under this subchapter

may be given by mailing the notice to the person for whom it

is intended, addressed to that person at the address given in

the last return filed by the person pursuant to this

subchapter, or if no return has been filed, then to any

address obtainable. The mailing of the notice is presumptive

evidence of the receipt of the notice by the person to whom

addressed. Any period of time which is determined according

to this subchapter by the giving of notice commences to run

from the date of mailing of the notice.

2. The provisions of the Code relative to the limitation

of time for the enforcement of a civil remedy shall not apply

to any proceeding or action taken to levy, appraise, assess,

determine, or enforce the collection of any tax or penalty

provided by this chapter.

Sec. 133. NEW SECTION 423.40 PENALTIES — OFFENSES — LIMITATION.

1. In addition to the sales or use tax or additional sales

or use tax, the taxpayer shall pay a penalty as provided in

section 421.27. The taxpayer shall also pay interest on the

sales or use tax or additional sales or use tax at the rate in

effect under section 421.7 for each month counting each

fraction of a month as an entire month, computed from the date

the semimonthly or monthly tax deposit form or return was

required to be filed. The penalty and interest shall be paid

to the department and disposed of in the same manner as other

receipts under this subchapter. Unpaid penalties and interest

may be enforced in the same manner as the taxes imposed by

this chapter.

2.

a. Any person who knowingly sells tangible personal

property, tickets or admissions to places of amusement and

athletic events, or gas, water, electricity, or communication

service at retail, or engages in the furnishing of services

enumerated in section 423.2, in this state without procuring a

permit to collect tax, as provided in section 423.36, or who

violates section 423.24 and the officers of any corporation

who so act are guilty of a serious misdemeanor.

b. A person who knowingly sells tangible personal

property, tickets or admissions to places of amusement and

athletic events, or gas, water, electricity, or communication

service at retail, or engages in the furnishing of services

enumerated in section 423.2, in this state after the person's

sales tax permit has been revoked and before it has been

restored as provided in section 423.36, subsection 5, and the

officers of any corporation who so act are guilty of an

aggravated misdemeanor.

3. A person who willfully attempts in any manner to evade

any tax imposed by this chapter or the payment of the tax or a

person who makes or causes to be made a false or fraudulent

semimonthly or monthly tax deposit form or return with intent

to evade any tax imposed by subchapter II or III or the

payment of the tax is guilty of a class "D" felony.

4. The certificate of the director to the effect that a

tax has not been paid, that a return has not been filed, or

that information has not been supplied pursuant to the

provisions of this subchapter shall be prima facie evidence

thereof.

5. A person required to pay sales or use tax, or to make,

sign, or file a tax deposit form or return or supplemental

return, who willfully makes a false or fraudulent tax deposit

form or return, or willfully fails to pay at least ninety

percent of the tax or willfully fails to make, sign, or file

the tax deposit form or return, at the time required by law,

is guilty of a fraudulent practice.

6. A prosecution for an offense specified in this section

shall be commenced within six years after its commission.

Sec. 134. NEW SECTION 423.41 BOOKS — EXAMINATION.

Every retailer required or authorized to collect taxes

imposed by this chapter and every person using in this state

tangible personal property, services, or the product of

services shall keep records, receipts, invoices, and other

pertinent papers as the director shall require, in the form

that the director shall require, for as long as the director

has the authority to examine and determine tax due. The

director or any duly authorized agent of the department may

examine the books, papers, records, and equipment of any

person either selling tangible personal property or services

or liable for the tax imposed by this chapter, and investigate

the character of the business of any person in order to verify

the accuracy of any return made, or if a return was not made

by the person, ascertain and determine the amount due under

this chapter. These books, papers, and records shall be made

available within this state for examination upon reasonable

notice when the director deems it advisable and so orders.

The preceding requirements shall likewise apply to users and

persons furnishing services enumerated in section 423.2.

Sec. 135. NEW SECTION 423.42 STATUTES APPLICABLE.

1. The director shall administer the taxes imposed by

subchapters II and III in the same manner and subject to all

the provisions of, and all of the powers, duties, authority,

and restrictions contained in, section 422.25, subsection 4,

section 422.30, and sections 422.67 through 422.75.

2. All the provisions of section 422.26 shall apply in

respect to the taxes and penalties imposed by subchapters II

and III and this subchapter, except that, as applied to any

tax imposed by subchapters II and III, the lien provided in

section 422.26 shall be prior and paramount over all

subsequent liens upon any personal property within this state,

or right to such personal property, belonging to the taxpayer

without the necessity of recording as provided in section

422.26. The requirements for recording shall, as applied to

the taxes imposed by subchapters II and III, apply only to the

liens upon real property. When requested to do so by any

person from whom a taxpayer is seeking credit, or with whom

the taxpayer is negotiating the sale of any personal property,

or by any other person having a legitimate interest in such

information, the director shall, upon being satisfied that

such a situation exists, inform that person as to the amount

of unpaid taxes due by such taxpayer under the provisions of

subchapters II and III. The giving of this information under

these circumstances shall not be deemed a violation of section

422.72 as applied to subchapters II and III.

Sec. 136. NEW SECTION 423.43 DEPOSIT OF REVENUE — APPROPRIATIONS.

Except as otherwise provided in section 312.2, subsection

14, all revenues derived from the use tax on motor vehicles,

trailers, and motor vehicle accessories and equipment as

collected pursuant to sections 423.26 and 423.27 shall be

deposited and credited to the road use tax fund and shall be

used exclusively for the construction, maintenance, and

supervision of public highways.

1. Notwithstanding any provision of this section which

provides that all revenues derived from the use tax on motor

vehicles, trailers, and motor vehicle accessories and

equipment as collected pursuant to sections 423.26 and 423.27

shall be deposited and credited to the road use tax fund,

eighty percent of the revenues shall be deposited and credited

as follows:

a. Twenty-five percent of all such revenue, up to a

maximum of four million two hundred fifty thousand dollars per

quarter, shall be deposited into and credited to the Iowa

comprehensive petroleum underground storage tank fund created

in section 455G.3, and the moneys so deposited are a

continuing appropriation for expenditure under chapter 455G,

and moneys so appropriated shall not be used for other

purposes.

b. Any such revenues remaining shall be credited to the

road use tax fund.

2. Notwithstanding any other provision of this section

that provides that all revenue derived from the use tax on

motor vehicles, trailers, and motor vehicle accessories and

equipment as collected pursuant to section 423.26 shall be

deposited and credited to the road use tax fund, twenty

percent of the revenues shall be credited and deposited as

follows: one-half to the road use tax fund and one-half to

the primary road fund to be used for the commercial and

industrial highway network.

3. All other revenue arising under the operation of this

chapter shall be credited to the general fund of the state.

Sec. 137. NEW SECTION 423.44 REIMBURSEMENT FOR PRIMARY ROAD FUND.

From moneys deposited into the road use tax fund, the

department may credit to the primary road fund any amount of

revenues derived from the use tax on motor vehicles, trailers,

and motor vehicle accessories and equipment as collected

pursuant to sections 423.26 and 423.27 to the extent necessary

to reimburse that fund for the expenditures not otherwise

eligible to be made from the primary road fund, which are made

for repairing, improving, and maintaining bridges over the

rivers bordering the state. Expenditures for those portions

of bridges within adjacent states may be included when they

are made pursuant to an agreement entered into under section

313.63, 313A.34, or 314.10.

Sec. 138. NEW SECTION 423.45 REFUNDS — EXEMPTION CERTIFICATES.

1. If an amount of tax represented by a retailer to a

consumer or user as constituting tax due is computed upon a

sales price that is not taxable or the amount represented is

in excess of the actual taxable amount and the amount

represented is actually paid by the consumer or user to the

retailer, the excess amount of tax paid shall be returned to

the consumer or user upon notification to the retailer by the

department that an excess payment exists.

2. If an amount of tax represented by a retailer to a

consumer or user as constituting tax due is computed upon a

sales price that is not taxable or the amount represented is

in excess of the actual taxable amount and the amount

represented is actually paid by the consumer or user to the

retailer, the excess amount of tax paid shall be returned to

the consumer or user upon proper notification to the retailer

by the consumer or user that an excess payment exists.

"Proper" notification is written notification which allows a

retailer at least sixty days to respond and which contains

enough information to allow a retailer to determine the

validity of a consumer's or user's claim that an excess amount

of tax has been paid. No cause of action shall accrue against

a retailer for excess tax paid until sixty days after proper

notice has been given the retailer by the consumer or user.

3. In the circumstances described in subsections 1 and 2,

a retailer has the option to either return any excess amount

of tax paid to a consumer or user, or to remit the amount

which a consumer or user has paid to the retailer to the

department.

4.

a. The department shall issue or the seller may

separately provide exemption certificates in the form

prescribed by the director, including certificates not made of

paper, which conform to the requirements of paragraph "c", to

assist retailers in properly accounting for nontaxable sales

of tangible personal property or services to purchasers for a

nontaxable purpose. The department shall also allow the use

of exemption certificates for those circumstances in which a

sale is taxable but the seller is not obligated to collect tax

from the buyer.

b. The sales tax liability for all sales of tangible

personal property and all sales of services is upon the seller

and the purchaser unless the seller takes in good faith from

the purchaser a valid exemption certificate stating under

penalty of perjury that the purchase is for a nontaxable

purpose and is not a retail sale as defined in section 423.1,

or the seller is not obligated to collect tax due, or unless

the seller takes a fuel exemption certificate pursuant to

subsection 5. If the tangible personal property or services

are purchased tax free pursuant to a valid exemption

certificate which is taken in good faith by the seller, and

the tangible personal property or services are used or

disposed of by the purchaser in a nonexempt manner, the

purchaser is solely liable for the taxes and shall remit the

taxes directly to the department and sections 423.31, 423.32,

423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 shall apply

to the purchaser.

c. A valid exemption certificate is an exemption

certificate which is complete and correct according to the

requirements of the director.

d. A valid exemption certificate is taken in good faith by

the seller when the seller has exercised that caution and

diligence which honest persons of ordinary prudence would

exercise in handling their own business affairs, and includes

an honesty of intention and freedom from knowledge of

circumstances which ought to put one upon inquiry as to the

facts. In order for a seller to take a valid exemption

certificate in good faith, the seller must exercise reasonable

prudence to determine the facts supporting the valid exemption

certificate, and if any facts upon such certificate would lead

a reasonable person to further inquiry, such inquiry must be

made with an honest intent to discover the facts.

e. If the circumstances change and as a result the

tangible personal property or services are used or disposed of

by the purchaser in a nonexempt manner or the purchaser

becomes obligated to pay the tax, the purchaser is liable

solely for the taxes and shall remit the taxes directly to the

department in accordance with this subsection.

5.

a. The department shall issue or the seller may

separately provide fuel exemption certificates in the form

prescribed by the director.

b. For purposes of this subsection:

(1) "Fuel" includes gas, electricity, water, heat, steam,

and any other tangible personal property consumed in creating

heat, power, or steam.

(2) "Fuel consumed in processing" means fuel used or

consumed for processing including grain drying, for providing

heat or cooling for livestock buildings or for greenhouses or

buildings or parts of buildings dedicated to the production of

flowering, ornamental, or vegetable plants intended for sale

in the ordinary course of business, for use in aquaculture

production, or for generating electric current, or in

implements of husbandry engaged in agricultural production.

(3) "Fuel exemption certificate" means an exemption

certificate given by the purchaser under penalty of perjury to

assist retailers in properly accounting for nontaxable sales

of fuel consumed in processing.

(4) "Substantial change" means a change in the use or

disposition of tangible personal property and services by the

purchaser such that the purchaser pays less than ninety

percent of the purchaser's actual sales tax liability. A

change includes a misstatement of facts in an application made

pursuant to paragraph "d" or in a fuel exemption certificate.

c. The seller may accept a completed fuel exemption

certificate, as prepared by the purchaser, for three years

unless the purchaser files a new completed exemption

certificate. If the fuel is purchased tax free pursuant to a

fuel exemption certificate which is taken by the seller, and

the fuel is used or disposed of by the purchaser in a

nonexempt manner, the purchaser is solely liable for the

taxes, and shall remit the taxes directly to the department

and sections 423.31, 423.32, 423.37, 423.38, 423.39, 423.40,

423.41, and 423.42 shall apply to the purchaser.

d. The purchaser may apply to the department for its

review of the fuel exemption certificate. In this event, the

department shall review the fuel exemption certificate within

twelve months from the date of application and determine the

correct amount of the exemption. If the amount determined by

the department is different than the amount that the purchaser

claims is exempt, the department shall promptly notify the

purchaser of the determination. Failure of the department to

make a determination within twelve months from the date of

application shall constitute a determination that the fuel

exemption certificate is correct as submitted. A

determination of exemption by the department is final unless

the purchaser appeals to the director for a revision of the

determination within sixty days after the date of the notice

of determination. The director shall grant a hearing, and

upon the hearing, the director shall determine the correct

exemption and notify the purchaser of the decision by mail.

The decision of the director is final unless the purchaser

seeks judicial review of the director's decision under section

423.38 within sixty days after the date of the notice of the

director's decision. Unless there is a substantial change,

the department shall not impose penalties pursuant to section

423.40 both retroactively to purchases made after the date of

application and prospectively until the department gives

notice to the purchaser that a tax or additional tax is due,

for failure to remit any tax due which is in excess of a

determination made under this section. A determination made

by the department pursuant to this subsection does not

constitute an audit for purposes of section 423.37.

e. If the circumstances change and the fuel is used or

disposed of by the purchaser in a nonexempt manner, the

purchaser is solely liable for the taxes and shall remit the

taxes directly to the department in accordance with paragraph

"c".

f. The purchaser shall attach documentation to the fuel

exemption certificate which is reasonably necessary to support

the exemption for fuel consumed in processing. If the

purchaser files a new exemption certificate with the seller,

documentation shall not be required if the purchaser

previously furnished the seller with this documentation and

substantial change has not occurred since that documentation

was furnished or if fuel consumed in processing is separately

metered and billed by the seller.

6. Nothing in this section authorizes any cause of action

by any person to recover sales or use taxes directly from the

state or extends any person's time to seek a refund of sales

or use taxes which have been collected and remitted to the

state.

Sec. 139. NEW SECTION 423.46 RATE AND BASE CHANGES.

The department shall make a reasonable effort to provide

sellers with as much advance notice as practicable of a rate

change and to notify sellers of legislative changes in the tax

base and amendments to sales and use tax rules. Failure of a

seller to receive notice or failure of this state to provide

notice or limit the effective date of a rate change shall not

relieve the seller of its obligation to collect sales or use

taxes for this state.

Sec. 140. NEW SECTION 423.47 REFUNDS AND CREDITS.

If it shall appear that, as a result of mistake, an amount

of tax, penalty, or interest has been paid which was not due

under the provisions of this chapter, such amount shall be

credited against any tax due, or to become due, on the books

of the department from the person who made the erroneous

payment, or such amount shall be refunded to such person by

the department. A claim for refund or credit that has not

been filed with the department within three years after the

tax payment for which a refund or credit is claimed became

due, or one year after such tax payment was made, whichever

time is the later, shall not be allowed by the director.

Sec. 141. NEW SECTION 423.48 RESPONSIBILITIES AND RIGHTS OF SELLERS REGISTERED UNDER THE AGREEMENT.

1. By registering under the agreement, the seller agrees

to collect and remit sales and use taxes for all its taxable

Iowa sales. Iowa's withdrawal from the agreement or

revocation of its membership in the agreement shall not

relieve a seller from its responsibility to remit taxes

previously collected on behalf of this state.

2. The following provisions apply to any seller who

registers under the agreement:

a. The seller may register on-line.

b. Registration under the agreement and the collection of

Iowa sales and use taxes shall not be used as factors in

determining whether the seller has nexus with Iowa for any

tax.

c. If registered under the agreement with any other member

state, the seller is considered to be registered in Iowa.

d. The seller is not required to pay registration fees or

other charges.

e. A written signature from the seller is not required.

f. The seller may register by way of an agent. The

agent's appointment shall be in writing and submitted to the

department if requested by the department.

g. The seller may cancel its registration at any time

under procedures adopted by the governing board established

pursuant to the agreement. Cancellation does not relieve the

seller of its liability for remitting any Iowa taxes

collected.

3. The following additional responsibilities and rights

apply to model sellers:

a. A model 1 seller's obligation to calculate, collect,

and remit sales and use taxes shall be performed by its

certified service provider, except for the seller's obligation

to remit tax on its own purchases. As the seller's agent, the

certified service provider is liable for its model 1 seller's

sales and use tax due Iowa on all sales transactions it

processes for the seller except as set out in this section. A

seller that contracts with a certified service provider is not

liable to the state for sales or use tax due on transactions

processed by the certified service provider unless the seller

misrepresents the types of items or services it sells or

commits fraud. In the absence of probable cause to believe

that the seller has committed fraud or made a material

misrepresentation, the seller is not subject to audit on the

transactions processed by the certified service provider. A

model 1 seller is subject to audit for transactions not

processed by the certified service provider. The director is

authorized to perform a system check of the model 1 seller and

review the seller's procedures to determine if the certified

service provider's system is functioning properly and the

extent to which the seller's transactions are being processed

by the certified service provider.

b. A model 2 seller shall calculate the amount of tax due

on a transaction by the use of a certified automated system,

but shall collect and remit tax on its own sales. A person

that provides a certified automated system is responsible for

the proper functioning of that system and is liable to this

state for underpayments of tax attributable to errors in the

functioning of the certified automated system. A seller that

uses a certified automated system remains responsible and is

liable to the state for reporting and remitting tax.

c. A model 3 seller shall use its own proprietary

automated system to calculate tax due and collect and remit

tax on its own sales. A model 3 seller is liable for the

failure of its proprietary automated system to meet the

applicable performance standard.

Sec. 142. NEW SECTION 423.49 RETURNS.

1. All model 1, 2, or 3 sellers are subject to all of the

following return requirements:

a. The seller is required to file only one return per

month for this state and for all taxing jurisdictions within

this state.

b. The date for filing returns shall be determined under

rules adopted by the director. However, in no case shall the

return be due earlier than the twentieth day of the following

month.

c. The director shall request additional information

returns. These returns shall not be required more frequently

than every six months.

2. Any registered seller which does not have a legal

obligation to register in this state and is not a model 1, 2,

or 3 seller is subject to all of the following return

requirements:

a. The seller is required to file a return within one year

of the month of initial registration and shall file a return

on an annual basis in succeeding years.

b. In addition to the return required in paragraph "a", if

the seller accumulates more than one thousand dollars in total

state and local tax, the seller is required to file a return

in the following month.

c. The format of the return and the due date of the

initial return and the annual return shall be determined under

rules adopted by the department.

Sec. 143. NEW SECTION 423.50 REMITTANCE OF FUNDS.

1. Only one remittance of tax per return is required

except as provided in this subsection. Sellers that collect

more than thirty thousand dollars in sales and use taxes for

this state during the preceding calendar year shall be

required to make additional remittances as required under

rules adopted by the director. The filing of a return is not

required with an additional remittance.

2. All remittances shall be remitted electronically.

3. Electronic payments may be made either by automated

clearinghouse credit or automated clearinghouse debit. Any

data accompanying a remittance must be formatted using uniform

tax type and payment codes approved by the governing board

established pursuant to the agreement. An alternative method

for making same-day payments shall be determined under rules

adopted by the director.

4. If a due date falls on a legal banking holiday in this

state, the taxes are due on the succeeding business day.

Sec. 144. NEW SECTION 423.51 ADMINISTRATION OF EXEMPTIONS.

1. The following provisions shall apply when a purchaser

claims an exemption:

a. The seller shall obtain identifying information of the

purchaser and the reason for claiming a tax exemption at the

time of the purchase as determined by the member states acting

jointly.

b. A purchaser is not required to provide a signature to

claim an exemption from tax unless a paper certificate is

used.

c. The seller shall use the standard form for claiming an

exemption electronically as adopted jointly by the member

states.

d. The seller shall obtain the same information for proof

of a claimed exemption regardless of the medium in which the

transaction occurred.

e. The department may authorize a system wherein the

purchaser exempt from the payment of the tax is issued an

identification number which shall be presented to the seller

at the time of the sale.

f. The seller shall maintain proper records of exempt

transactions and provide them to the department when

requested.

g. The department shall administer entity-based and use-

based exemptions when practicable through a direct pay tax

permit, an exemption certificate, or another means that does

not burden sellers. For the purposes of this paragraph:

(1) An "entity-based exemption" is an exemption based on

who purchases the product or who sells the product.

(2) A "use-based exemption" is an exemption based on the

purchaser's use of the product.

2. Sellers that follow the requirements of this section

are relieved from any tax otherwise applicable if it is

determined that the purchaser improperly claimed an exemption

and that the purchaser is liable for the nonpayment of tax.

This relief from liability does not apply to a seller who

fraudulently fails to collect the tax or solicits purchasers

to participate in the unlawful claim of an exemption.

Sec. 145. NEW SECTION 423.52 RELIEF FROM LIABILITY FOR SELLERS AND CERTIFIED SERVICE PROVIDERS.

Sellers and certified service providers are relieved from

liability to this state or its local taxing jurisdictions for

having charged and collected the incorrect amount of sales or

use tax resulting from the seller or certified service

provider relying on erroneous data provided by this state on

tax rates, boundaries, or taxing jurisdiction assignments. If

this state provides an address-based system for assigning

taxing jurisdictions whether or not pursuant to the federal

Mobile Telecommunications Sourcing Act, the director is not

required to provide liability relief for errors resulting from

reliance on the information provided by this state.

Sec. 146. NEW SECTION 423.53 BAD DEBTS AND MODEL 1 SELLERS.

A certified service provider may claim, on behalf of a

model 1 seller, any bad debt deduction as provided in section

423.21. The certified service provider must credit or refund

the full amount of any bad debt deduction or refund received

to the seller.

Sec. 147. NEW SECTION 423.54 AMNESTY FOR REGISTERED SELLERS.

1. Subject to the limitations in subsections 2 through 6,

the following provisions apply:

a. Amnesty is provided for uncollected or unpaid sales or

use tax to a seller who registers to pay or to collect and

remit applicable sales or use tax on sales made to purchasers

in this state in accordance with the terms of the agreement,

provided the seller was not so registered in this state in the

twelve-month period preceding the commencement of Iowa's

participation in the agreement.

b. Amnesty precludes assessment of the seller for

uncollected or unpaid sales or use tax together with penalty

or interest for sales made during the period the seller was

not registered in this state, provided registration occurs

within twelve months of the commencement of Iowa's

participation in the agreement.

c. Amnesty shall be provided to any seller lawfully

registered under the agreement by any other member state prior

to the date of the commencement of Iowa's participation in the

agreement.

2. Amnesty is not available to a seller with respect to

any matter or matters for which the seller received notice of

the commencement of an audit and which audit is not yet

finally resolved, including any related administrative and

judicial processes.

3. Amnesty is not available for sales or use taxes already

paid or remitted or to taxes collected by the seller.

4. Amnesty is fully effective absent the seller's fraud or

intentional misrepresentation of a material fact as long as

the seller continues registration and continues payment or

collection and remittance of applicable sales or use taxes for

a period of at least thirty-six months. The statute of

limitations applicable to asserting a tax liability is tolled

during this thirty-six month period.

5. Amnesty is applicable only to sales or use taxes due

from a seller in its capacity as a seller and not to sales or

use taxes due from a seller in its capacity as a buyer.

6. The director may allow amnesty on terms and conditions

more favorable to a seller than the terms required by this

section.

Sec. 148. NEW SECTION 423.55 DATABASES.

The department shall provide and maintain databases

required by the agreement for the benefit of sellers

registered under the agreement.

Sec. 149. NEW SECTION 423.56 CONFIDENTIALITY AND PRIVACY PROTECTIONS UNDER MODEL 1.

1. As used in this section:

a. "Anonymous data" means information that does not

identify a person.

b. "Confidential taxpayer information" means all

information that is protected under this state's laws, rules,

and privileges.

c. "Personally identifiable information" means information

that identifies a person.

2. With very limited exceptions, a certified service

provider shall perform its tax calculation, remittance, and

reporting functions without retaining the personally

identifiable information of consumers.

3. A certified service provider may perform its services

in this state only if the certified service provider certifies

that:

a. Its system has been designed and tested to ensure that

the fundamental precept of anonymity is respected.

b. Personally identifiable information is only used and

retained to the extent necessary for the administration of

model 1 sellers with respect to exempt purchasers.

c. It provides consumers clear and conspicuous notice of

its information practices, including what information it

collects, how it collects the information, how it uses the

information, how long, if at all, it retains the information,

and whether it discloses the information to member states.

This notice shall be satisfied by a written privacy policy

statement accessible by the public on the official web site of

the certified service provider.

d. Its collection, use, and retention of personally

identifiable information is limited to that required by the

member states to ensure the validity of exemptions from

taxation that are claimed by reason of a consumer's status or

the intended use of the goods or services purchased.

e. It provides adequate technical, physical, and

administrative safeguards so as to protect personally

identifiable information from unauthorized access and

disclosure.

4. The department shall provide public notification of its

practices relating to the collection, use, and retention of

personally identifiable information.

5. When any personally identifiable information that has

been collected and retained by the department or certified

service provider is no longer required for the purposes set

forth in subsection 3, paragraph "d", that information shall

no longer be retained by the department or certified service

provider.

6. When personally identifiable information regarding an

individual is retained by or on behalf of this state, this

state shall provide reasonable access by such individual to

his or her own information in the state's possession and a

right to correct any inaccurately recorded information.

7. This privacy policy is subject to enforcement by the

department and the attorney general.

8. This state's laws and rules regarding the collection,

use, and maintenance of confidential taxpayer information

remain fully applicable and binding. Without limitation, the

agreement does not enlarge or limit the state's or

department's authority to:

a. Conduct audits or other review as provided under the

agreement and state law.

b. Provide records pursuant to its examination of public

records law, disclosure laws of individual governmental

agencies, or other regulations.

c. Prevent, consistent with state law, disclosures of

confidential taxpayer information.

d. Prevent, consistent with federal law, disclosures or

misuse of federal return information obtained under a

disclosure agreement with the internal revenue service.

e. Collect, disclose, disseminate, or otherwise use

anonymous data for governmental purposes.

9. This privacy policy does not preclude the certification

of a certified service provider whose privacy policy is more

protective of confidential taxpayer information or personally

identifiable information than is required by the agreement.

Sec. 150. NEW SECTION 423.57 STATUTES APPLICABLE.

The director shall administer this subchapter as it relates

to the taxes imposed in this chapter in the same manner and

subject to all the provisions of, and all of the powers,

duties, authority, and restrictions contained in sections

423.14, 423.15, 423.16, 423.17, 423.18, 423.19, 423.20,

423.21, 423.22, 423.23, 423.24, 423.25, 423.28, 423.29,

423.31, 423.32, 423.33, 423.34, 423.35, 423.37, 423.38,

423.39, 423.40, 423.41, and 423.42, section 423.43, subsection

3, and sections 423.45, 423.46, and 423.47.

Sec.

151.

1. Sections 422.42 through 422.59, Code 2003, are

repealed.

2. Chapter 423, Code 2003, is repealed.

Sec. 152. Section 15.331A, Code 2003, is amended to read as follows:

15.331A SALES, SERVICES, AND USE TAX REFUND — CONTRACTOR OR SUBCONTRACTOR.

The eligible business or a supporting business shall be

entitled to a refund of the sales and use taxes paid under

chapters 422 andchapter 423 for gas, electricity, water, or

sewer utility services, goods, wares, or merchandise, or on

services rendered, furnished, or performed to or for a

contractor or subcontractor and used in the fulfillment of a

written contract relating to the construction or equipping of

a facility within the economic development area of the

eligible business or a supporting business. Taxes

attributable to intangible property and furniture and

furnishings shall not be refunded.

To receive the refund a claim shall be filed by the

eligible business or a supporting business with the department

of revenue and finance as follows:

1. The contractor or subcontractor shall state under oath,

on forms provided by the department, the amount of the sales

of goods, wares, or merchandise or services rendered,

furnished, or performed including water, sewer, gas, and

electric utility services for use in the economic development

area upon which sales or use tax has been paid prior to the

project completion, and shall file the forms with the eligible

business or supporting business before final settlement is

made.

2. The eligible business or a supporting business shall,

not more than one year after project completion, make

application to the department for any refund of the amount of

the sales and use taxes paid pursuant to chapter 422 or 423

upon any goods, wares, or merchandise, or services rendered,

furnished, or performed, including water, sewer, gas, and

electric utility services. The application shall be made in

the manner and upon forms to be provided by the department,

and the department shall audit the claim and, if approved,

issue a warrant to the eligible business or supporting

business in the amount of the sales or use tax which has been

paid to the state of Iowa under a contract. A claim filed by

the eligible business or a supporting business in accordance

with this section shall not be denied by reason of a

limitation provision set forth in chapter 421, 422, or 423.

3. A contractor or subcontractor who willfully makes a

false report of tax paid under the provisions of this section

is guilty of a simple misdemeanor and in addition is liable

for the payment of the tax and any applicable penalty and

interest.

Sec. 153. Section 15.334A, Code 2003, is amended to read as follows:

15.334A SALES AND USE TAX EXEMPTION.

An eligible business may claim an exemption from sales and

use taxation under section 422.45423.3, subsection 2746, for

property which is exempt from taxation under section 15.334,

notwithstanding the requirements of section 422.45423.3,

subsection 2746, or any other provision of the Code to the

contrary.

Sec. 154. Section 15A.9, subsections 5, 6, and 7, Code 2003, are amended to read as follows:

5. PROPERTY TAX EXEMPTION.

a. All property, as defined in section 427A.1, subsection

1, paragraphs "e" and "j", Code 1993, used by the primary

business or a supporting business and located within the zone,

shall be exempt from property taxation for a period of twenty

years beginning with the year it is first assessed for

taxation. In order to be eligible for this exemption, the

property shall be acquired or leased by the primary business

or a supporting business or relocated by the primary business

or a supporting business to the zone from outside the state

prior to project completion.

b. Property which is exempt for property tax purposes

under this subsection is eligible for the sales and use tax

exemption under section 422.45423.3, subsection 2746,

notwithstanding that subsection or any other provision of the

Code to the contrary.

6. SALES, SERVICES, AND USE TAX REFUND. Taxes paid

pursuant to chapter 422 or 423 on the gross receiptssales

price or rental price of property purchased or rented by the

primary business or a supporting business for use by the

primary business or a supporting business within the zone or

on gas, electricity, water, and sewer utility services prior

to project completion shall be refunded to the primary

business or supporting business if the item was purchased or

the service was performed or received prior to project

completion. Claims under this section shall be submitted on

forms provided by the department of revenue and finance not

later than six months after project completion. The refund in

this subsection shall not apply to furniture or furnishings,

or intangible property.

7. SALES, SERVICES, AND USE TAX REFUND — CONTRACTOR OR SUBCONTRACTOR. The primary business or a supporting business

shall be entitled to a refund of the sales and use taxes paid

under chapters 422 andchapter 423 for gas, electricity,

water, or sewer utility services, goods, wares, or

merchandise, or on services rendered, furnished, or performed

to or for a contractor or subcontractor and used in the

fulfillment of a written contract relating to the construction

or equipping of a facility within the zone of the primary

business or a supporting business. Taxes attributable to

intangible property and furniture and furnishings shall not be

refunded.

To receive the refund a claim shall be filed by the primary

business or a supporting business with the department of

revenue and finance as follows:

a. The contractor or subcontractor shall state under oath,

on forms provided by the department, the amount of the sales

of goods, wares, or merchandise or services rendered,

furnished, or performed including water, sewer, gas, and

electric utility services for use in the zone upon which sales

or use tax has been paid prior to the project completion, and

shall file the forms with the primary business or supporting

business before final settlement is made.

b. The primary business or a supporting business shall,

not more than six months after project completion, make

application to the department for any refund of the amount of

the sales and use taxes paid pursuant to chapter 422 or 423

upon any goods, wares, or merchandise, or services rendered,

furnished, or performed, including water, sewer, gas, and

electric utility services. The application shall be made in

the manner and upon forms to be provided by the department,

and the department shall audit the claim and, if approved,

issue a warrant to the primary business or supporting business

in the amount of the sales or use tax which has been paid to

the state of Iowa under a contract. A claim filed by the

primary business or a supporting business in accordance with

this subsection shall not be denied by reason of a limitation

provision set forth in chapter 421, 422, or 423.

c. A contractor or subcontractor who willfully makes a

false report of tax paid under the provisions of this

subsection is guilty of a simple misdemeanor and in addition

is liable for the payment of the tax and any applicable

penalty and interest.

Sec. 155. Section 28A.17, unnumbered paragraph 1, Code 2003, is amended to read as follows:

If an authority is established as provided in section 28A.6

and after approval of a referendum by a simple majority of

votes cast in each metropolitan area in favor of the sales and

services tax, the governing board of a county in this state

within a metropolitan area which is part of the authority

shall impose, at the request of the authority, a local sales

and services tax at the rate of one-fourth of one percent on

gross receiptsthe sales price taxed by this state under

chapter 422, division IVsection 423.2, within the

metropolitan area located in this state. The referendum shall

be called by resolution of the board and shall be held as

provided in section 28A.6 to the extent applicable. The

ballot proposition shall contain a statement as to the

specific purpose or purposes for which the revenues shall be

expended and the date of expiration of the tax. The local

sales and services tax shall be imposed on the same basis,

with the same exceptions, and following the same

administrative procedures as provided for a county under

sections 422B.8 and 422B.9. The amount of the sale, for the

purposes of determining the amount of the local sales and

services tax under this section, does not include the amount

of any local sales and services tax imposed under sections

422B.8 and 422B.9.

Sec. 156. Section 29C.15, Code 2003, is amended to read as follows:

29C.15 TAX-EXEMPT PURCHASES.

All purchases under the provisions of this chapter shall be

exempt from the taxes imposed by sections 422.43423.2 and

423.2423.5.

Sec. 157. Section 99E.10, subsection 1, paragraph b, Code 2003, is amended to read as follows:

b. An amount equal to the product of the state sales tax

rate under section 422.43423.2 multiplied by the gross sales

price of each ticket or share sold shall be deducted as the

sales tax on the sale of that ticket or share, remitted to the

treasurer of state and deposited into the state general fund.

Sec. 158. Section 123.187, subsection 2, Code 2003, is amended to read as follows:

2. A winery licensed or permitted pursuant to laws

regulating alcoholic beverages in a state which affords this

state an equal reciprocal shipping privilege may ship into

this state by private common carrier, to a person twenty-one

years of age or older, not more than eighteen liters of wine

per month, for consumption or use by the person. Such wine

shall not be resold. Shipment of wine pursuant to this

subsection is not subject to sales tax under section 422.43

423.2, use tax under section 423.2423.5, or the wine

gallonage tax under section 123.183, and does not require a

refund value for beverage container control purposes under

chapter 455C.

Sec. 159. Section 262.54, Code 2003, is amended to read as follows:

262.54 COMPUTER SALES.

Sales, by an institution under the control of the board of

regents, of computer equipment, computer software, and

computer supplies to students and faculty at the institution

are retail sales under chapter 422, division IV423.

Sec. 160. Section 303.9, subsection 2, Code 2003, is amended to read as follows:

2. The department may sell mementos and other items

relating to Iowa history and historic sites on the premises of

property under control of the department and at the state

capitol. Notwithstanding sections 18.12 and 18.16, the

department may directly and independently enter into rental

and lease agreements with private vendors for the purpose of

selling mementos. All fees and income produced by the sales

and rental or lease agreements shall be credited to the

account of the department. The mementos and other items sold

by the department or vendors under this subsection are exempt

from section 18.6. The department is not a retailer under

chapter 422 and the sale of such mementos and other items by

the department is not a retail sale under chapter 422 and is

exempt from the sales tax.

Sec. 161. Section 312.1, subsection 4, Code 2003, is amended to read as follows:

4. To the extent provided in section 423.24423.43,

subsection 1, paragraph "b", from revenue derived from the use

tax, under chapter 423 on motor vehicles, trailers, and motor

vehicle accessories and equipment.

Sec. 162. Section 312.2, subsections 14 and 16, Code 2003, are amended to read as follows:

14. The treasurer of state, before making the allotments

provided for in this section, shall credit monthly from the

road use tax fund to the general fund of the state from

revenue credited to the road use tax fund under section 423.24

423.43, subsection 1, paragraph "b", an amount equal to one-

twentieth of eighty percent of the revenue from the operation

of section 423.7423.26.

There is appropriated from the general fund of the state

for each fiscal year to the state department of transportation

the amount of revenues credited to the general fund of the

state during the fiscal year under this subsection to be used

for purposes of public transit assistance under chapter 324A.

16. The treasurer of state, before making the allotments

provided for in this section, shall credit monthly from the

road use tax fund to the motorcycle rider education fund

established in section 321.180B, an amount equal to one dollar

per year of license validity for each issued or renewed

driver's license which is valid for the operation of a

motorcycle. Moneys credited to the motorcycle rider education

fund under this subsection shall be taken from moneys credited

to the road use tax fund under section 423.24423.43.

Sec. 163. Section 321.20, subsection 5, Code 2003, is amended to read as follows:

5. The amount of tax to be paid under section 423.7

423.26.

Sec. 164. Section 321.24, subsections 1 and 3, Code 2003, are amended to read as follows:

1. Upon receipt of the application for title and payment

of the required fees for a motor vehicle, trailer, or

semitrailer, the county treasurer or the department shall,

when satisfied as to the application's genuineness and

regularity, and, in the case of a mobile home or manufactured

home, that taxes are not owing under chapter 435, issue a

certificate of title and, except for a mobile home or

manufactured home, a registration receipt, and shall file the

application, the manufacturer's or importer's certificate, the

certificate of title, or other evidence of ownership, as

prescribed by the department. The registration receipt shall

be delivered to the owner and shall contain upon its face the

date issued, the name and address of the owner, the

registration number assigned to the vehicle, the amount of the

fee paid, the amount of tax paid pursuant to section 423.7

423.26, the type of fuel used, and a description of the

vehicle as determined by the department, and upon the reverse

side a form for notice of transfer of the vehicle. The name

and address of any lessee of the vehicle shall not be printed

on the registration receipt or certificate of title. Up to

three owners may be listed on the registration receipt and

certificate of title.

3. The certificate of title shall contain upon its face

the identical information required upon the face of the

registration receipt. In addition, the certificate of title

shall contain a statement of the owner's title, the title

number assigned to the owner or owners of the vehicle, the

amount of tax paid pursuant to section 423.7423.26, the name

and address of the previous owner, and a statement of all

security interests and encumbrances as shown in the

application, upon the vehicle described, including the nature

of the security interest, date of notation, and name and

address of the secured party.

Sec. 165. Section 321.34, subsection 7, paragraph c, Code 2003, is amended to read as follows:

c. The fees for a collegiate registration plate are as

follows:

(1) A registration fee of twenty-five dollars.

(2) A special collegiate registration fee of twenty-five

dollars.

These fees are in addition to the regular annual

registration fee. The fees collected by the director under

this subsection shall be paid monthly to the treasurer of

state and credited by the treasurer of state to the road use

tax fund. Notwithstanding section 423.24423.43 and prior to

the revenues being credited to the road use tax fund under

section 423.24423.43, subsection 1, paragraph "b", the

treasurer of state shall credit monthly from those revenues

respectively, to Iowa state university of science and

technology, the university of northern Iowa, and the state

university of Iowa, the amount of the special collegiate

registration fees collected in the previous month for

collegiate registration plates designed for the university.

The moneys credited are appropriated to the respective

universities to be used for scholarships for students

attending the universities.

Sec. 166. Section 321.34, subsection 11, paragraph c, Code 2003, is amended to read as follows:

c. The special natural resources fee for letter number

designated natural resources plates is thirty-five dollars.

The fee for personalized natural resources plates is forty-

five dollars which shall be paid in addition to the special

natural resources fee of thirty-five dollars. The fees

collected by the director under this subsection shall be paid

monthly to the treasurer of state and credited to the road use

tax fund. Notwithstanding section 423.24423.43, and prior to

the crediting of revenues to the road use tax fund under

section 423.24423.43, subsection 1, paragraph "b", the

treasurer of state shall credit monthly from those revenues to

the Iowa resources enhancement and protection fund created

pursuant to section 455A.18, the amount of the special natural

resources fees collected in the previous month for the natural

resources plates.

Sec. 167. Section 321.34, subsection 11A, paragraph c, Code 2003, is amended to read as follows:

c. The special fee for letter number designated love our

kids plates is thirty-five dollars. The fee for personalized

love our kids plates is twenty-five dollars, which shall be

paid in addition to the special love our kids fee of thirty-

five dollars. The fees collected by the director under this

subsection shall be paid monthly to the treasurer of state and

credited to the road use tax fund. Notwithstanding section

423.24423.43, and prior to the crediting of revenues to the

road use tax fund under section 423.24423.43, subsection 1,

paragraph "b", the treasurer of state shall transfer monthly

from those revenues to the Iowa department of public health

the amount of the special fees collected in the previous month

for the love our kids plates. Notwithstanding section 8.33,

moneys transferred under this subsection shall not revert to

the general fund of the state.

Sec. 168. Section 321.34, subsection 11B, paragraph c, Code 2003, is amended to read as follows:

c. The special fee for letter number designated motorcycle

rider education plates is thirty-five dollars. The fee for

personalized motorcycle rider education plates is twenty-five

dollars, which shall be paid in addition to the special

motorcycle rider education fee of thirty-five dollars. The

fees collected by the director under this subsection shall be

paid monthly to the treasurer of state and credited to the

road use tax fund. Notwithstanding section 423.24423.43, and

prior to the crediting of revenues to the road use tax fund

under section 423.24423.43, subsection 1, paragraph "b", the

treasurer of state shall transfer monthly from those revenues

to the department for use in accordance with section 321.180B,

subsection 6, the amount of the special fees collected in the

previous month for the motorcycle rider education plates.

Sec. 169. Section 321.34, subsection 13, paragraph d, Code 2003, is amended to read as follows:

d. A state agency may submit a request to the department

recommending a special registration plate. The alternate fee

for letter number designated plates is thirty-five dollars

with a ten dollar annual special renewal fee. The fee for

personalized plates is twenty-five dollars which is in

addition to the alternative fee of thirty-five dollars with an

annual personalized plate renewal fee of five dollars which is

in addition to the special renewal fee of ten dollars. The

alternate fees are in addition to the regular annual

registration fee. The alternate fees collected under this

paragraph shall be paid monthly to the treasurer of state and

credited to the road use tax fund. Notwithstanding section

423.24423.43, and prior to the crediting of the revenues to

the road use tax fund under section 423.24423.43, subsection

1, paragraph "b", the treasurer of state shall credit monthly

the amount of the alternate fees collected in the previous

month to the state agency that recommended the special

registration plate.

Sec. 170. Section 321.34, subsection 21, paragraph c, Code 2003, is amended to read as follows:

c. The special fees collected by the director under this

subsection shall be paid monthly to the treasurer of state and

credited to the road use tax fund. Notwithstanding section

423.24423.43, and prior to the crediting of revenues to the

road use tax fund under section 423.24423.43, subsection 1,

paragraph "b", the treasurer of state shall credit monthly to

the Iowa heritage fund created under section 303.9A the amount

of the special fees collected in the previous month for the

Iowa heritage plates.

Sec. 171. Section 321.34, subsection 22, paragraph b, Code 2003, is amended to read as follows:

b. The special school transportation fee for letter number

designated education plates is thirty-five dollars. The fee

for personalized education plates is twenty-five dollars,

which shall be paid in addition to the special school

transportation fee of thirty-five dollars. The annual special

school transportation fee is ten dollars for letter number

designated registration plates and is fifteen dollars for

personalized registration plates which shall be paid in

addition to the regular annual registration fee. The fees

collected by the director under this subsection shall be paid

monthly to the treasurer of state and credited to the road use

tax fund. Notwithstanding section 423.24423.43, and prior to

the crediting of revenues to the road use tax fund under

section 423.24423.43, subsection 1, paragraph "b", the

treasurer of state shall transfer monthly from those revenues

to the school budget review committee in accordance with

section 257.31, subsection 17, the amount of the special

school transportation fees collected in the previous month for

the education plates.

Sec. 172. Section 321F.9, Code 2003, is amended to read as follows:

321F.9 OPTION TO PURCHASE — DEALER'S LICENSE.

Any person engaged in business in this state shall not

enter into any agreement for the use of a motor vehicle under

the terms of which suchthat person grants to another an

option to purchase suchthe motor vehicle without first having

obtained a motor vehicle dealer's license under the provisions

of chapter 322, and all sales of motor vehicles under such

options shall be subject to sales or use taxes imposed under

the provisions of chapters 422 andchapter 423. Nothing

contained in this section shall require such person to have a

place of business as provided by section 322.6, subsection 8.

Sec. 173. Section 327I.26, Code 2003, is amended to read as follows:

327I.26 APPROPRIATION TO AUTHORITY.

Notwithstanding section 423.24423.43, and prior to the

application of section 423.24423.43, subsection 1, paragraph

"b", there shall be deposited into the general fund of the

state and is appropriated to the authority from eighty percent

of the revenues derived from the operation of section 423.7

423.26, the amounts certified by the authority under section

327I.25. However, the total amount deposited into the general

fund and appropriated to the Iowa railway finance authority

under this section shall not exceed two million dollars

annually. Moneys appropriated to the Iowa railway finance

authority under this section are appropriated only for the

payment of principal and interest on obligations or the

payment of leases guaranteed by the authority as provided

under section 327I.25.

Sec. 174. Section 328.26, unnumbered paragraph 2, Code 2003, is amended to read as follows:

When an aircraft is registered to a person for the first

time the fee submitted to the department shall include the tax

imposed by section 422.43423.2 or section 423.2423.5 or

evidence of the exemption of the aircraft from the tax imposed

under section 422.43423.2 or 423.2423.5.

Sec. 175. Section 331.557, subsection 3, Code 2003, is amended to read as follows:

3. Collect the use tax on vehicles subject to registration

as provided in sections 423.6, 423.7, and 423.7A423.14,

423.26, and 423.27.

Sec. 176. Section 357A.15, unnumbered paragraph 2, Code 2003, is amended to read as follows:

A rural water district organized under chapter 504A shall

receive a refund of sales or use taxes upon submitting an

application to the department of revenue and finance for such

the refund of taxes imposed upon the gross receiptssales

price of all sales of building materials, supplies, or

equipment sold to a contractor or used in the fulfillment of a

written contract for the construction of facilities for such

the rural water district to the same extent as a rural water

district organized under this chapter may obtain a refund

under section 422.45423.4, subsection 71.

Sec. 177. Section 421.10, Code 2003, is amended to read as follows:

421.10 APPEAL PERIOD — APPLICABILITY.

The appeal period for revision of assessment of tax,

interest, and penalties set out under section 422.28, 422.54

423.37, 437A.9, 437A.22, 452A.64, 453A.29, or 453A.46 applies

to appeals to notices from the department denying changes in

filing methods, denying refund claims, and denying portions of

refund claims for the tax covered by that section, and notices

of any department action directed to a specific taxpayer,

other than licensing, which involves a calculation.

Sec. 178. Section 421.17, subsection 22B, Code 2003, is amended to read as follows:

22B. EnterTo enter into agreements or compacts with

remote sellers, retailers, or third-party providers for the

voluntary collection of Iowa sales or use taxes attributable

to sales into Iowa and to enter. The director has the

authority to enter into and perform all duties required of the

office of director by multistate agreements or compacts that

provide for the voluntary collection of sales and use taxes,

including joint audits with other states or audits on behalf

of other states. The agreements or compacts shall generally

conform to the provisions of Iowa sales and use tax statutes.

All fees for services, reimbursements, remuneration,

incentives, and costs incurred by the department associated

with these agreements or compacts may be paid or reimbursed

from the additional revenue generated. An amount is

appropriated from amounts generated to pay or reimburse all

costs associated with this subsection. Persons entering into

an agreement or compact with the department pursuant to this

subsection are subject to the requirements and penalties of

the confidentiality laws of this state regarding tax

information. Notwithstanding any other provisions of law, the

contract, agreement, or compact shall provide for the

registration, collection, report, and verification of amounts

subject to this subsection.

Sec. 179. Section 421.17, subsection 29, paragraph j, Code 2003, is amended to read as follows:

j. The department's existing right to credit against tax

due or to become due under section 422.73 or 423.47 is not to

be impaired by a right granted to or a duty imposed upon the

department or other state agency by this subsection. This

subsection is not intended to impose upon the department any

additional requirement of notice, hearing, or appeal

concerning the right to credit against tax due under section

422.73 or 423.47.

Sec. 180. Section 421.17, subsection 34, paragraph i, Code 2003, is amended to read as follows:

i. The director may distribute to credit reporting

entities and for publication the names, addresses, and amounts

of indebtedness owed to or being collected by the state if the

indebtedness is subject to the centralized debt collection

procedure established in this subsection. The director shall

adopt rules to administer this paragraph, and the rules shall

provide guidelines by which the director shall determine which

names, addresses, and amounts of indebtedness may be

distributed for publication. The director may distribute

information for publication pursuant to this paragraph,

notwithstanding sections 422.20, 422.72, and 423.23423.42, or

any other provision of state law to the contrary pertaining to

confidentiality of information.

Sec. 181. Section 421.26, Code 2003, is amended to read as follows:

421.26 PERSONAL LIABILITY FOR TAX DUE.

If a licensee or other person under section 452A.65, a

retailer or purchaser under chapter 422A or 422B, or section

422.52423.31 or 423.33, or a retailer or purchaser under

section 423.13423.32 or a user under section 423.14423.34

fails to pay a tax under those sections when due, an officer

of a corporation or association, notwithstanding sections

490A.601 and 490A.602, a member or manager of a limited

liability company, or a partner of a partnership, having

control or supervision of or the authority for remitting the

tax payments and having a substantial legal or equitable

interest in the ownership of the corporation, association,

limited liability company, or partnership, who has

intentionally failed to pay the tax is personally liable for

the payment of the tax, interest, and penalty due and unpaid.

However, this section shall not apply to taxes on accounts

receivable. The dissolution of a corporation, association,

limited liability company, or partnership shall not discharge

a person's liability for failure to remit the tax due.

Sec. 182. Section 421.28, Code 2003, is amended to read as follows:

421.28 EXCEPTIONS TO SUCCESSOR LIABILITY.

The immediate successor to a licensee's or retailer's

business or stock of goods under chapter 422A or 422B, or

section 422.52, 423.13, 423.14,423.33 or 452A.65, is not

personally liable for the amount of delinquent tax, interest,

or penalty due and unpaid if the immediate successor shows

that the purchase of the business or stock of goods was made

in good faith that no delinquent tax, interest, or penalty was

due and unpaid. For purposes of this section the immediate

successor shows good faith by evidence that the department had

provided the immediate successor with a certified statement

that no delinquent tax, interest, or penalty is unpaid, or

that the immediate successor had taken in good faith a

certified statement from the licensee, retailer, or seller

that no delinquent tax, interest, or penalty is unpaid. When

requested to do so by a person with whom the licensee or

retailer is negotiating the sale of the business or stock of

goods, the director of revenue and finance shall, upon being

satisfied that such a situation exists, inform that person as

to the amount of unpaid delinquent tax, interest, or penalty

due by the licensee or the retailer. The giving of the

information under this circumstance is not a violation of

section 422.20, 422.72, or 452A.63.

Sec. 183. Section 421B.11, unnumbered paragraph 3, Code 2003, is amended to read as follows:

Judicial review of the actions of the director may be

sought in accordance with the terms of the Iowa administrative

procedure Act, and section 422.55423.38.

Sec. 184. Section 422.7, subsection 21, paragraph a, subparagraph (1), unnumbered paragraph 1, Code 2003, is amended to read as follows:

Net capital gain from the sale of real property used in a

business, in which the taxpayer materially participated for

ten years, as defined in section 469(h) of the Internal

Revenue Code, and which has been held for a minimum of ten

years, or from the sale of a business, as defined in section

422.42423.1, in which the taxpayer was employed or in which

the taxpayer materially participated for ten years, as defined

in section 469(h) of the Internal Revenue Code, and which has

been held for a minimum of ten years. The sale of a business

means the sale of all or substantially all of the tangible

personal property or service of the business.

Sec. 185. Section 422.73, subsection 1, Code 2003, is amended by striking the subsection.

Sec. 186. Section 422A.1, unnumbered paragraphs 1, 3, 7, and 8, Code 2003, are amended to read as follows:

A city or county may impose by ordinance of the city

council or by resolution of the board of supervisors a hotel

and motel tax, at a rate not to exceed seven percent, which

shall be imposed in increments of one or more full percentage

points upon the gross receiptssales price from the renting of

sleeping rooms, apartments, or sleeping quarters in a hotel,

motel, inn, public lodging house, rooming house, manufactured

or mobile home which is tangible personal property, or tourist

court, or in any place where sleeping accommodations are

furnished to transient guests for rent, whether with or

without meals; except the gross receiptssales price from the

renting of sleeping rooms in dormitories and in memorial

unions at all universities and colleges located in the state

of Iowa and the guests of a religious institution if the

property is exempt under section 427.1, subsection 8, and the

purpose of renting is to provide a place for a religious

retreat or function and not a place for transient guests

generally. The tax when imposed by a city shall apply only

within the corporate boundaries of that city and when imposed

by a county shall apply only outside incorporated areas within

that county. "Renting" and "rent" include any kind of direct

or indirect charge for such sleeping rooms, apartments, or

sleeping quarters, or their use. However, the tax does not

apply to the gross receiptssales price from the renting of a

sleeping room, apartment, or sleeping quarters while rented by

the same person for a period of more than thirty-one

consecutive days.

A local hotel and motel tax shall be imposed on January 1,

April 1, July 1, or October 1, following the notification of

the director of revenue and finance. Once imposed, the tax

shall remain in effect at the rate imposed for a minimum of

one year. A local hotel and motel tax shall terminate only on

March 31, June 30, September 30, or December 31. At least

forty-fivesixty days prior to the tax being effective or

prior to a revision in the tax rate, or prior to the repeal of

the tax, a city or county shall provide notice by mail of such

action to the director of revenue and finance.

No tax permit other than the state sales tax permit

required under section 422.53423.36 may be required by local

authorities.

The tax levied shall be in addition to any state sales tax

imposed under section 422.43423.2. Section 422.25,

subsection 4, sections 422.30, 422.48 to 422.52, 422.54 to

422.58, 422.67, and 422.68, section 422.69, subsection 1, and

sections 422.70 to 422.75, section 423.14, subsection 1, and

sections 423.23, 423.24, 423.25, 423.31, 423.33, 423.35,

423.37 to 423.42, and 423.47, consistent with the provisions

of this chapter, apply with respect to the taxes authorized

under this chapter, in the same manner and with the same

effect as if the hotel and motel taxes were retail sales taxes

within the meaning of those statutes. Notwithstanding this

paragraph, the director shall provide for quarterly filing of

returns as prescribed in section 422.51 and for other than

quarterly filing of returns both as prescribed in section

422.51, subsection 2423.31. The director may require all

persons, as defined in section 422.42423.1, who are engaged

in the business of deriving gross receiptsany sales price

subject to tax under this chapter, to register with the

department.

Sec. 187. Section 422B.8, Code 2003, is amended to read as follows:

422B.8 LOCAL SALES AND SERVICES TAX.

A local sales and services tax at the rate of not more than

one percent may be imposed by a county on the gross receipts

sales price taxed by the state under chapter 422423, division

IVsubchapter II. A local sales and services tax shall be

imposed on the same basis as the state sales and services tax

or in the case of the use of natural gas, natural gas service,

electricity, or electric service on the same basis as the

state use tax and shall not be imposed on the sale of any

property or on any service not taxed by the state, except the

tax shall not be imposed on the gross receiptssales price

from the sale of motor fuel or special fuel as defined in

chapter 452A which is consumed for highway use or in

watercraft or aircraft if the fuel tax is paid on the

transaction and a refund has not or will not be allowed, on

the gross receiptssales price from the rental of rooms,

apartments, or sleeping quarters which are taxed under chapter

422A during the period the hotel and motel tax is imposed, on

the gross receiptssales price from the sale of equipment by

the state department of transportation, on the gross receipts

sales price from the sale of self-propelled building

equipment, pile drivers, motorized scaffolding, or attachments

customarily drawn or attached to self-propelled building

equipment, pile drivers, and motorized scaffolding, including

auxiliary attachments which improve the performance, safety,

operation, or efficiency of the equipment and replacement

parts and are directly and primarily used by contractors,

subcontractors, and builders for new construction,

reconstruction, alterations, expansion, or remodeling of real

property or structures, and on the gross receiptssales price

from the sale of a lottery ticket or share in a lottery game

conducted pursuant to chapter 99E and except the tax shall not

be imposed on the gross receiptssales price from the sale or

use of natural gas, natural gas service, electricity, or

electric service in a city or county where the gross receipts

sales price from the sale of natural gas or electric energy

are subject to a franchise fee or user fee during the period

the franchise or user fee is imposed. A local sales and

services tax is applicable to transactions within those

incorporated and unincorporated areas of the county where it

is imposed and shall be collected by all persons required to

collect state gross receiptssales taxes. However, a person

required to collect state retail sales tax under chapter 422

423, division IVsubchapter V or VI, is not required to

collect local sales and services tax on transactions delivered

within the area where the local sales and services tax is

imposed unless the person has physical presence in that taxing

area. All cities contiguous to each other shall be treated as

part of one incorporated area and the tax would be imposed in

each of those contiguous cities only if the majority of those

voting in the total area covered by the contiguous cities

favor its imposition.

The amount of the sale, for purposes of determining the

amount of the local sales and services tax, does not include

the amount of any state gross receipts taxessales tax.

A tax permit other than the state sales tax permit required

under section 422.53 or 423.10423.36 shall not be required by

local authorities.

If a local sales and services tax is imposed by a county

pursuant to this chapter, a local excise tax at the same rate

shall be imposed by the county on the purchase price of

natural gas, natural gas service, electricity, or electric

service subject to tax under chapter 423, subchapter III, and

not exempted from tax by any provision of chapter 423,

subchapter III. The local excise tax is applicable only to

the use of natural gas, natural gas service, electricity, or

electric service within those incorporated and unincorporated

areas of the county where it is imposed and, except as

otherwise provided in this chapter, shall be collected and

administered in the same manner as the local sales and

services tax. For purposes of this chapter, "local sales and

services tax" shall also include the local excise tax.

Sec. 188. Section 422B.9, subsections 1 and 2, Code 2003, are amended to read as follows:

1.

a. A local sales and services tax shall be imposed

either January 1 or July 1 following the notification of the

director of revenue and finance but not sooner than ninety

days following the favorable election and not sooner than

sixty days following notice to sellers, as defined in section

423.1. However, a jurisdiction which has voted to continue

imposition of the tax may impose that tax without repeal of

the prior tax.

b. A local sales and services tax shall be repealed only

on June 30 or December 31 but not sooner than ninety days

following the favorable election if one is held. However, a

local sales and services tax shall not be repealed before the

tax has been in effect for one year. At least forty days

before the imposition or repeal of the tax, a county shall

provide notice of the action by certified mail to the director

of revenue and finance.

c. The imposition of or a rate change for a local sales

and service tax shall not be applied to purchases from a

printed catalog wherein a purchaser computes the local tax

based on rates published in the catalog unless a minimum of

one hundred twenty days' notice of the imposition or rate

change has been given to the seller from the catalog and the

first day of a calendar quarter has occurred on or after the

one hundred twentieth day.

c.d. If a local sales and services tax has been imposed

prior to April 1, 2000, and at the time of the election a date

for repeal was specified on the ballot, the local sales and

services tax may be repealed on that date, notwithstanding

paragraph "b".

2.

a. The director of revenue and finance shall

administer a local sales and services tax as nearly as

possible in conjunction with the administration of state gross

receiptssales tax laws. The director shall provide

appropriate forms or provide on the regular state tax forms

for reporting local sales and services tax liability.

b. The ordinance of a county board of supervisors imposing

a local sales and services tax shall adopt by reference the

applicable provisions of the appropriate sections of chapter

422, division IV, and chapter 423. All powers and

requirements of the director to administer the state gross

receiptssales tax law and use tax law are applicable to the

administration of a local sales and services tax law and the

local excise tax, including but not limited to, the provisions

of section 422.25, subsection 4, sections 422.30, 422.48 to

422.52, 422.54 to 422.58, 422.67, and 422.68, section 422.69,

subsection 1, sections 422.70 to 422.75, 423.6, subsections 2

to 4, and sections 423.11 to 423.18, and 423.21section

423.14, subsection 1 and subsection 2, paragraphs "b" through

"e", and sections 423.15, 423.23, 423.24, 423.25, 423.31 to

423.35, 423.37 to 423.42, 423.46, and 423.47. Local officials

shall confer with the director of revenue and finance for

assistance in drafting the ordinance imposing a local sales

and services tax. A certified copy of the ordinance shall be

filed with the director as soon as possible after passage.

c. Frequency of deposits and quarterly reports of a local

sales and services tax with the department of revenue and

finance are governed by the tax provisions in section 422.52

423.31. Local tax collections shall not be included in

computation of the total tax to determine frequency of filing

under section 422.52423.31.

d. The director shall apply a boundary change of a county

or city imposing or collecting the local sales and service tax

to the imposition or collection of that tax only on the first

day of a calendar quarter which occurs sixty days or more

after the director has given notice of the boundary change to

sellers.

Sec. 189. Section 422C.2, subsections 4 and 6, Code 2003, are amended to read as follows:

4. "Person" means person as defined in section 422.42

423.1.

6. "Rental price" means the consideration for renting an

automobile valued in money, and means the same as "gross

taxable services""sales price" as defined in section 422.42

423.1.

Sec. 190. Section 422C.3, Code 2003, is amended to read as follows:

422C.3 TAX ON RENTAL OF AUTOMOBILES.

1. A tax of five percent is imposed upon the rental price

of an automobile if the rental transaction is subject to the

sales and services tax under chapter 422423, division IV

subchapter II, or the use tax under chapter 423, subchapter

III. The tax shall not be imposed on any rental transaction

not taxable under the state sales and services tax, as

provided in section 422.45423.3, or the state use tax, as

provided in section 423.4423.6, on automobile rental

receipts.

2. The lessor shall collect the tax by adding the tax to

the rental price of the automobile.

3. The tax, when collected, shall be stated as a distinct

item separate and apart from the rental price of the

automobile and the sales and services tax imposed under

chapter 422423, division IVsubchapter II, or the use tax

imposed under chapter 423, subchapter III.

Sec. 191. Section 422C.4, Code 2003, is amended to read as follows:

422C.4 ADMINISTRATION AND ENFORCEMENT.

All powers and requirements of the director of revenue and

finance to administer the state gross receiptssales tax law

under chapter 422, division IV,423 are applicable to the

administration of the tax imposed under section 422C.3,

including but not limited to section 422.25, subsection 4,

sections 422.30, 422.48 through 422.52, 422.54 through 422.58,

422.67, and 422.68, section 422.69, subsection 1, and sections

422.70 through 422.75, section 423.14, subsection 1, and

sections 423.15, 423.23, 423.24, 423.25, 423.31, 423.33,

423.35 and 423.37 through 423.42, 423.45, 423.46, and 423.47.

However, as an exception to the powers specified in section

422.52, subsection 1423.31, the director shall only require

the filing of quarterly reports.

Sec. 192.

Section 422E.1, subsection 1, is amended to read

as follows:

1. A local sales and services tax for school

infrastructure purposes may be imposed by a county on behalf

of school districts as provided in this chapter.

If a local sales and services tax for school infrastructure

is imposed by a county pursuant to this chapter, a local

excise tax for school infrastructure at the same rate shall be

imposed by the county on the purchase price of natural gas,

natural gas service, electricity, or electric service subject

to tax under chapter 423, subchapter III, and not exempted

from tax by any provision of chapter 423, subchapter III. The

local excise tax for school infrastructure is applicable only

to the use of natural gas, natural gas service, electricity,

or electric service within those incorporated and

unincorporated areas of the county where it is imposed and,

except as otherwise provided in this chapter, shall be

collected and administered in the same manner as the local

sales and services tax for school infrastructure. For

purposes of this chapter, "local sales and services tax for

school infrastructure" shall also include the local excise tax

for school infrastructure.

Sec. 193. Section 422E.3, subsections 1, 2, and 3, Code 2003, are amended to read as follows:

1. If a majority of those voting on the question of

imposition of a local sales and services tax for school

infrastructure purposes favors imposition of the tax, the tax

shall be imposed by the county board of supervisors within the

county pursuant to section 422E.2, at the rate specified for a

ten-year duration on the gross receiptssales price taxed by

the state under chapter 422423, division IVsubchapter II.

2. The tax shall be imposed on the same basis as the state

sales and services tax or in the case of the use of natural

gas, natural gas service, electricity, or electric service on

the same basis as the state use tax and shall not be imposed

on the sale of any property or on any service not taxed by the

state, except the tax shall not be imposed on the gross

receiptssales price from the sale of motor fuel or special

fuel as defined in chapter 452A which is consumed for highway

use or in watercraft or aircraft if the fuel tax is paid on

the transaction and a refund has not or will not be allowed,

on the gross receiptssales price from the rental of rooms,

apartments, or sleeping quarters which are taxed under chapter

422A during the period the hotel and motel tax is imposed, on

the gross receiptssales price from the sale of equipment by

the state department of transportation, on the gross receipts

sales price from the sale of self-propelled building

equipment, pile drivers, motorized scaffolding, or attachments

customarily drawn or attached to self-propelled building

equipment, pile drivers, and motorized scaffolding, including

auxiliary attachments which improve the performance, safety,

operation, or efficiency of the equipment, and replacement

parts and are directly and primarily used by contractors,

subcontractors, and builders for new construction,

reconstruction, alterations, expansion, or remodeling of real

property or structures, and on the gross receiptssales price

from the sale of a lottery ticket or share in a lottery game

conducted pursuant to chapter 99E and except the tax shall not

be imposed on the gross receiptssales price from the sale or

use of natural gas, natural gas service, electricity, or

electric service in a city or county where the gross receipts

sales price from the sale of natural gas or electric energy

are subject to a franchise fee or user fee during the period

the franchise or user fee is imposed.

3. The tax is applicable to transactions within the county

where it is imposed and shall be collected by all persons

required to collect state gross receiptssales or local excise

taxes. However, a person required to collect state retail

sales tax under chapter 422, division IV,423 is not required

to collect local sales and services tax on transactions

delivered within the area where the local sales and services

tax is imposed unless the person has physical presence in that

taxing area. The amount of the sale, for purposes of

determining the amount of the tax, does not include the amount

of any state gross receiptssales taxes or excise taxes or

other local option sales or excise taxes. A tax permit other

than the state tax permit required under section 422.53 or

423.10423.36 shall not be required by local authorities.

Sec. 194. Section 425.30, Code 2003, is amended to read as follows:

425.30 NOTICES.

Section 422.57423.39, subsection 1, shall apply to all

notices under this division.

Sec. 195. Section 425.31, Code 2003, is amended to read as follows:

425.31 APPEALS.

Any person aggrieved by an act or decision of the director

of revenue and finance or the department of revenue and

finance under this division shall have the same rights of

appeal and review as provided in sections 421.1 and 422.55

423.38 and the rules of the department of revenue and finance.

Sec. 196. Section 452A.66, unnumbered paragraph 1, Code 2003, is amended to read as follows:

The appropriate state agency shall administer the taxes

imposed by this chapter in the same manner as and subject to

section 422.25, subsection 4 and section 422.52, subsection 3

423.35.

Sec. 197. Section 455B.455, Code 2003, is amended to read as follows:

455B.455 SURCHARGE IMPOSED.

A land burial surcharge tax of two percent is imposed on

the fee for land burial of a hazardous waste. The owner of

the land burial facility shall remit the tax collected to the

director of revenue and finance after consultation with the

director according to rules that the director shall adopt.

The director shall forward a copy of the site license to the

director of revenue and finance which shall be the appropriate

license for the collection of the land burial surcharge tax

and shall be subject to suspension or revocation if the site

license holder fails to collect or remit the tax collected

under this section. The provisions of sectionssection

422.25, subsection 4, sections 422.30, 422.48 to 422.52,

422.54 to 422.58, 422.67, and 422.68, section 422.69,

subsection 1, andsections 422.70 to 422.75, section 423.14,

subsection 1, and sections 423.23, 423.24, 423.25, 423.31,

423.33, 423.35, 423.37 to 423.42, and 423.47, consistent with

the provisions of this part 6 of division IV, shall apply with

respect to the taxes authorized under this part, in the same

manner and with the same effect as if the land burial

surcharge tax were retail sales taxes within the meaning of

those statutes. Notwithstanding the provisions of this

paragraphsection, the director shall provide for only

quarterly filing of returns as prescribed in section 422.51

423.31. Taxes collected by the director of revenue and

finance under this section shall be deposited in the general

fund of the state.

Sec. 198. Section 455G.3, subsection 1, Code 2003, is amended to read as follows:

1. The Iowa comprehensive petroleum underground storage

tank fund is created as a separate fund in the state treasury,

and any funds remaining in the fund at the end of each fiscal

year shall not revert to the general fund but shall remain in

the Iowa comprehensive petroleum underground storage tank

fund. Interest or other income earned by the fund shall be

deposited in the fund. The fund shall include moneys credited

to the fund under this section, section 423.24423.43,

subsection 1, paragraph "a", and sections 455G.8, 455G.9, and

455G.11, and other funds which by law may be credited to the

fund. The moneys in the fund are appropriated to and for the

purposes of the board as provided in this chapter. Amounts in

the fund shall not be subject to appropriation for any other

purpose by the general assembly, but shall be used only for

the purposes set forth in this chapter. The treasurer of

state shall act as custodian of the fund and disburse amounts

contained in it as directed by the board including automatic

disbursements of funds as received pursuant to the terms of

bond indentures and documents and security provisions to

trustees and custodians. The treasurer of state is authorized

to invest the funds deposited in the fund at the direction of

the board and subject to any limitations contained in any

applicable bond proceedings. The income from such investment

shall be credited to and deposited in the fund. The fund

shall be administered by the board which shall make

expenditures from the fund consistent with the purposes of the

programs set out in this chapter without further

appropriation. The fund may be divided into different

accounts with different depositories as determined by the

board and to fulfill the purposes of this chapter.

Sec. 199. Section 455G.6, subsection 4, Code 2003, is amended to read as follows:

4. Grant a mortgage, lien, pledge, assignment, or other

encumbrance on one or more improvements, revenues, asset of

right, accounts, or funds established or received in

connection with the fund, including revenues derived from the

use tax under section 423.24423.43, subsection 1, paragraph

"a", and deposited in the fund or an account of the fund.

Sec. 200. Section 455G.8, subsection 2, Code 2003, is amended to read as follows:

2. USE TAX. The revenues derived from the use tax imposed

under chapter 423, subchapter III. The proceeds of the use

tax under section 423.24423.43, subsection 1, paragraph "a",

shall be allocated, consistent with this chapter, among the

fund's accounts, for debt service and other fund expenses,

according to the fund budget, resolution, trust agreement, or

other instrument prepared or entered into by the board or

authority under direction of the board.

Sec. 201. Section 455G.9, subsection 2, Code 2003, is amended to read as follows:

2. REMEDIAL ACCOUNT FUNDING. The remedial account shall

be funded by that portion of the proceeds of the use tax

imposed under chapter 423, subchapter III, and other moneys

and revenues budgeted to the remedial account by the board.

Sec. 202. Section 2.67, Code 2003, is repealed.

Sec. 203.

CODE EDITOR DIRECTIVE.

The Code editor is

directed to transfer Code chapter 423A to Code chapter 421A

and to transfer Code chapters 422A, 422B, 422C, and 422E to

Code chapters 423A, 423B, 423C, and 423E, respectively. The

Code editor is directed to correct Code references as required

due to the changes made in this Act.

Sec. 204.

IOWA STREAMLINED SALES TAX ADVISORY COUNCIL.

1. An Iowa streamlined sales tax advisory council is

created. The advisory council shall review, study, and submit

recommendations to the Iowa streamlined sales and use tax

delegation regarding the proposed streamlined sales and use

tax agreement formalized by the project's implementing sales

on November 12, 2002, the proposed language conforming Iowa's

sales and use tax to the national agreement, and the following

issues:

a. Uniform definitions proposed in the current streamlined

sales and use tax agreement and future proposals.

b. Effects upon taxability of items newly defined in Iowa.

c. Impacts upon business as a result of the streamlined

sales and use tax.

d. Technology implementation issues.

e. Any other issues that are brought before the

streamlined sales and use tax implementing state or the

streamlined sales and use tax governing board.

2. The department shall provide administrative support to

the Iowa streamlined sales tax advisory council. The advisory

council shall be representative of Iowa's business community

and economy when reviewing and recommending solutions to

streamlined sales and use tax issues. The advisory council

shall provide the general assembly and the governor with final

recommendations made to the Iowa streamlined sales and use tax

delegation upon the conclusion of each calendar year.

3. The director of revenue, in consultation with the Iowa

taxpayers association and the Iowa association of business and

industry, shall appoint members to the Iowa streamlined sales

tax advisory council, which shall consist of the following

members:

a. One member from the department of revenue and finance.

b. Three members representing small Iowa businesses, at

least one of whom must be a retailer, and at least one of whom

shall be a supplier.

c. Three members representing medium Iowa businesses, at

least one of whom shall be a retailer, and at least one of

whom shall be a supplier.

d. Three members representing large Iowa businesses, at

least one of whom shall be a retailer, and at least one of

whom shall be a supplier.

e. One member representing taxpayers as a whole.

f. One member representing the retail community as a

whole.

g. Any other member the director of revenue and finance

deems appropriate.

Sec. 205.

EFFECTIVE DATE.

Except for the section creating

the Iowa streamlined sales tax advisory council, this division

of this Act takes effect July 1, 2004.

Sec. 206. NEW SECTION 18A.8 CAPITOL COMPLEX PARKING STRUCTURE REVOLVING FUND.

A capitol complex parking structure revolving fund is

created in the state treasury. The capitol complex parking

structure revolving fund shall be administered by the

department of administrative services and shall consist of

moneys collected by the department as parking fees, moneys

appropriated to the fund by the general assembly, and any

other moneys obtained or accepted by the department for

deposit in the revolving fund. The proceeds of the revolving

fund are appropriated to and shall be used by the department

for costs associated with the management, operation, and

maintenance of the capitol complex parking structure located

at the intersection of Pennsylvania and Grand avenues in Des

Moines. The department shall submit an annual report not

later than January 31 to the members of the general assembly

and the legislative services agency, of the activities funded

by and expenditures made from the revolving fund during the

preceding fiscal year. Section 8.33 does not apply to any

moneys in the revolving fund and, notwithstanding section

12C.7, subsection 2, earnings or interest on moneys deposited

in the revolving fund shall be credited to the revolving fund.

Sec. 207.

CAPITOL COMPLEX PARKING STRUCTURE MANAGEMENT — REQUEST FOR PROPOSALS.

The department of administrative

services shall issue a request for proposals for the

management, operation, and maintenance of the state-owned

parking structure located at the intersection of Pennsylvania

and Grand avenues in Des Moines. The request for proposals

shall include all of the following services:

1. The collection of parking fees and administration of

parking permits.

2. Daily janitorial maintenance and necessary annual

maintenance, pursuant to standards outlined in the parking

garage maintenance manual published by the parking consultants

council of the national parking association.

3. Long-term structural maintenance.

Awarding of a contract for the management, operation, and

maintenance of the parking structure is subject to approval by

the general assembly.

Sec. 208.

CAPITOL COMPLEX PARKING STRUCTURE — EMPLOYEE PARKING FEES.

The department of administrative services shall

establish reasonable parking fees for state employees for the

use of the state-owned parking structure located at the

intersection of Pennsylvania and Grand avenues in Des Moines.

Parking fees shall not be established or collected for use of

the parking structure by members of the general public. Such

fees shall be deposited in the capitol complex parking

structure revolving fund created in section 18A.8, as enacted

by this Act.

Sec. 209.

EFFECTIVE DATE.

Unless otherwise provided in

this Act, this Act takes effect July 1, 2003.