Senate Study Bill 3234 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act relating to the policy administration of the tax 1 and related laws by the department of revenue, including 2 administration of income taxes, sales and use taxes, motor 3 fuel taxes, property taxes, and inheritance taxes, providing 4 for taxpayer information exchanges with the department of 5 workforce development, making penalties applicable, and 6 including effective date and applicability provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 6247XC (4) 83 tw/sc

S.F. _____ DIVISION I 1 WITHHOLDING TAX CREDITS 2 Section 1. Section 15A.7, unnumbered paragraph 1, Code 3 Supplement 2009, is amended to read as follows: 4 In order to promote the creation of additional high-quality 5 new jobs within the state, an agreement under section 260E.3 6 may include a provision for a supplemental new jobs credit from 7 withholding from jobs created under the agreement. As used in 8 this section, “new jobs credit from withholding” means the same 9 as defined in section 260E.2. A provision in an agreement for 10 which a supplemental credit from withholding is included shall 11 provide for the following: 12 Sec. 2. Section 15A.9, subsection 3, paragraph a, 13 unnumbered paragraph 1, Code Supplement 2009, is amended to 14 read as follows: 15 At the request of the primary business or a supporting 16 business, an agreement authorizing a supplemental new 17 jobs credit from withholding from jobs within the zone 18 may be entered into between the department of revenue, a 19 community college, and the primary business or a supporting 20 business. As used in this subsection, “new jobs credit from 21 withholding” means the same as defined in section 260E.2. The 22 agreement shall be for program services for an additional job 23 training project, as defined in chapter 260E. The agreement 24 shall provide for the following: 25 Sec. 3. Section 15E.197, subsection 4, Code Supplement 26 2009, is amended to read as follows: 27 4. For purposes of this section, “eligible business” means 28 a business which has been approved to receive incentives and 29 assistance by the department of economic development pursuant 30 to application as provided in section 15E.195 , and “new jobs 31 credit from withholding” means the same as defined in section 32 260E.2 . 33 Sec. 4. Section 260E.2, subsection 11, Code 2009, is amended 34 to read as follows: 35 -1- LSB 6247XC (4) 83 tw/sc 1/ 26

S.F. _____ 11. “New jobs credit from withholding” means the 1 credit procedure for crediting to employers the amount of 2 withholding tax payments made by the department of revenue to 3 community colleges as provided in section 260E.5. 4 Sec. 5. Section 260E.5, subsections 2, 4, 5, and 6, Code 5 2009, are amended to read as follows: 6 2. a. The employer shall remit the total amount of 7 withholding payments due pursuant to section 422.16 to the 8 department of revenue. An amount equal to one and one-half 9 percent of the gross wages paid by the employer to each 10 employee participating in a project shall be credited from the 11 payment made by an employer pursuant to section 422.16 . If 12 the amount of the withholding by the employer is less than one 13 and one-half percent of the gross wages paid to the employees 14 covered by the agreement, then the employer shall receive a 15 credit against other withholding taxes due by the employer. 16 The employer shall remit the amount of the credit quarterly 17 in the same manner as withholding payments are reported to 18 the department of revenue, withholding tax payments to be 19 made by the department of revenue on a quarterly basis to the 20 account of each community college to be allocated to and when 21 collected paid into a special fund of the community college to 22 pay the principal of and interest on certificates issued by the 23 community college to finance or refinance, in whole or in part, 24 the project. 25 b. When the principal and interest on the certificates have 26 been paid, the employer credits department of revenue shall 27 cease and any money to credit withholding tax moneys to the 28 account of the community college. All moneys received after 29 the certificates have been paid shall be remitted to the 30 treasurer of state to be deposited in the general fund of the 31 state. 32 4. The employer shall certify to the department of revenue 33 that the new jobs credit in from withholding is in accordance 34 with an agreement and shall provide any other information the 35 -2- LSB 6247XC (4) 83 tw/sc 2/ 26

S.F. _____ department may require. 1 5. A In order to receive the moneys credited to a community 2 college’s account, the community college shall certify to 3 the department of revenue the amount of new jobs credit 4 from withholding an employer has remitted to be allocated 5 and paid to the special fund and shall provide any other 6 information the department may require. Upon reviewing the 7 required information and verifying that the certified amount 8 is correct, the department of revenue shall pay the certified 9 amount into the special fund of the community college. 10 6. An employee participating in a project will must receive 11 full credit for the amount withheld as provided in section 12 422.16. 13 Sec. 6. Section 260G.2, subsection 13, Code 2009, is amended 14 to read as follows: 15 13. “Program job credit” means the credit procedure for 16 crediting to employers the amount of withholding tax payments 17 made by the department of revenue to community colleges as 18 provided in section 260G.4A. 19 Sec. 7. Section 260G.4A, subsections 2 through 5, Code 2009, 20 are amended to read as follows: 21 2. a. Eligibility for program job credits shall be 22 based on certification of program job positions and program 23 job wages by the employer at the time established in the 24 agreement. An employer shall remit the total amount of 25 withholding payments due pursuant to section 422.16 to the 26 department of revenue. An amount up to ten percent of the 27 gross program job wage as certified by the employer in the 28 agreement shall be credited from the total payment made by 29 an employer pursuant to section 422.16 . The employer shall 30 receive a credit against all withholding taxes due by the 31 employer regardless of whether or not the withholding from the 32 employer of current program job wages is less than ten percent. 33 The employer shall remit the amount of the credit quarterly in 34 the same manner as withholding payments are reported to the 35 -3- LSB 6247XC (4) 83 tw/sc 3/ 26

S.F. _____ department of revenue, withholding tax payments to be made by 1 the department of revenue on a quarterly basis to the account 2 of each community college to be allocated to and when collected 3 paid into a special fund of the community college to pay, in 4 part, the program costs. 5 b. When the program costs have been paid, the employer 6 credits department of revenue shall cease and any to credit 7 withholding tax moneys to the account of the community college. 8 All moneys received after the program costs have been paid 9 shall be remitted to the treasurer of state to be deposited in 10 the general fund of the state. 11 3. The employer shall certify to the department of revenue 12 that the program job credit is in accordance with the agreement 13 and shall provide any other information the department may 14 require. 15 4. A In order to receive the moneys credited to a community 16 college’s account, the community college shall certify to 17 the department of revenue that the amount of the program job 18 credit to be allocated and paid to the special fund is correct 19 and in accordance with an agreement and shall provide any other 20 information the department may require. Upon reviewing the 21 required information and verifying that the certified amount 22 is correct, the department of revenue shall pay the certified 23 amount into the special fund of the community college. 24 5. Employees from of an employer participating in an 25 agreement shall must receive full credit for the amount 26 withheld as provided in section 422.16. 27 Sec. 8. Section 403.19A, subsection 1, Code Supplement 28 2009, is amended by adding the following new paragraph: 29 NEW PARAGRAPH . Og. “Targeted jobs withholding credit” 30 means the procedure for crediting to employers the amount of 31 withholding tax payments made by the department of revenue to a 32 pilot project city as provided in subsection 3. 33 Sec. 9. Section 403.19A, subsection 3, paragraphs a, b, 34 e, f, g, and h, Code Supplement 2009, are amended to read as 35 -4- LSB 6247XC (4) 83 tw/sc 4/ 26

S.F. _____ follows: 1 a. A pilot project city may provide by ordinance for 2 the deposit into a designated account in the special fund 3 described in section 403.19, subsection 2 , of the targeted 4 jobs withholding credit described in this section and an 5 employer may enter into a withholding agreement pursuant to 6 this subsection. Such an agreement may include a provision 7 for a targeted jobs withholding credit . The targeted jobs 8 withholding credit shall be based upon the wages paid to 9 employees pursuant to a withholding agreement. 10 b. The employer shall remit the total amount of withholding 11 payments due pursuant to section 422.16 to the department 12 of revenue. An amount equal to three percent of the gross 13 wages paid by an employer to each employee under a withholding 14 agreement shall be credited from the payment made by the 15 employer pursuant to section 422.16 . If the amount of the 16 withholding by the employer is less than three percent of the 17 gross wages paid to the employees covered by the withholding 18 agreement, the employer shall receive a credit against other 19 withholding taxes due by the employer or may carry the credit 20 forward for up to ten years or until depleted, whichever is the 21 earlier. The employer shall remit the amount of the credit 22 quarterly, in the same manner as withholding payments are 23 reported to the department of revenue, withholding tax payments 24 to be made by the department of revenue on a quarterly basis to 25 the account of each pilot project city to be allocated to and 26 when collected paid into a designated account in the special 27 fund for the urban renewal area in which the targeted jobs are 28 located. All amounts so deposited shall be used or pledged by 29 the pilot project city for an urban renewal project related to 30 the employer pursuant to the withholding agreement. 31 e. (1) The employer shall certify to the department 32 of revenue that the targeted jobs withholding credit is in 33 accordance with the withholding agreement and shall provide 34 any other information the department may require. Notice of 35 -5- LSB 6247XC (4) 83 tw/sc 5/ 26

S.F. _____ any withholding agreement shall be provided promptly to the 1 department of revenue following execution of the agreement by 2 the pilot project city and the employer. 3 (2) Following termination of the withholding agreement, 4 the employer credits department of revenue shall cease and any 5 money to credit withholding tax moneys to the account of the 6 pilot project city. All moneys received by the pilot project 7 city after termination shall be remitted to the treasurer of 8 state to be deposited into the general fund of the state. 9 Notice shall be provided promptly to the department of revenue 10 following termination. 11 f. If the employer ceases to meet the requirements of the 12 withholding agreement, the agreement shall be terminated and 13 any targeted jobs withholding tax credits for the benefit 14 of payments credited to the employer employer’s obligations 15 under the agreement shall cease. However, in regard to the 16 number of new jobs that are to be created, if the employer 17 has met the number of new jobs to be created pursuant to 18 the withholding agreement and subsequently the number of new 19 jobs falls below the required level, the employer shall not 20 be considered as not meeting the new job requirement until 21 eighteen months after the date of the decrease in the number of 22 new jobs created. 23 g. A In order to receive the moneys credited to a pilot 24 project city’s account, the pilot project city shall certify 25 to the department of revenue the amount of the targeted jobs 26 withholding credit an employer has remitted to the city to 27 be allocated and paid to the special fund as provided for 28 under the agreement and shall provide any other information 29 the department may require. Upon reviewing the required 30 information and verifying that the certified amount is correct, 31 the department of revenue shall pay the certified amount into 32 the designated account of the special fund of the urban renewal 33 area in which the targeted jobs are located. 34 h. An employee whose wages are subject to a withholding 35 -6- LSB 6247XC (4) 83 tw/sc 6/ 26

S.F. _____ agreement shall must receive full credit for the amount 1 withheld as provided in section 422.16. 2 Sec. 10. Section 403.19A, subsection 3, paragraph j, 3 subparagraph (1), Code Supplement 2009, is amended to read as 4 follows: 5 (1) A pilot project city entering into a withholding 6 agreement shall arrange for matching local financial support 7 for the project. The local match required under this paragraph 8 “j” shall be in an amount equal to one dollar for every dollar 9 of targeted jobs withholding credit tax payments received by 10 the pilot project city from the department of revenue . 11 Sec. 11. Section 422.16A, Code 2009, is amended to read as 12 follows: 13 422.16A Job training withholding —— certification and 14 transfer. 15 Upon the completion by a business of its repayment 16 obligation of the payment of program costs for a training 17 project funded under chapter 260E, including a job training 18 project funded under section 15A.8 or repaid in whole or in 19 part by the supplemental new jobs credit from withholding 20 under section 15A.7 or section 15E.197, the sponsoring 21 community college shall report to the department of economic 22 development the amount of withholding paid by the business tax 23 payments credited by the department of revenue to the account 24 of the community college during the final twelve months of 25 withholding payments. The department of economic development 26 shall notify the department of revenue of that the amount 27 reported by the community college . The department of 28 revenue shall credit to the workforce development fund account 29 established in section 15.342A twenty-five percent of that 30 amount each quarter for a period of ten years. If the amount 31 of withholding from the business or employer credited by 32 the department of revenue is insufficient, the department 33 of revenue shall prorate the quarterly amount credited to 34 the workforce development fund account. The maximum amount 35 -7- LSB 6247XC (4) 83 tw/sc 7/ 26

S.F. _____ from all employers of withholding tax credit which shall be 1 transferred to the workforce development fund account in any 2 year is four million dollars. 3 Sec. 12. APPLICABILITY. 4 1. This division of this Act applies to all agreements 5 concerning withholding tax credit payments entered into 6 pursuant to the provisions of chapters 260E and 260G and 7 section 403.19A before, on, or after the effective date of this 8 division of this division of this Act. 9 2. An agreement entered into prior to the effective date of 10 this division of this Act shall be administered in compliance 11 with the provisions of this division of this Act, and the 12 parties to such agreements shall amend the agreements as 13 necessary. 14 DIVISION II 15 PROPERTY TAXES 16 Sec. 13. Section 421.17, subsection 17, Code 2009, is 17 amended to read as follows: 18 17. To prepare and issue a state appraisal manual which each 19 county and city assessor shall use in assessing and valuing all 20 classes of property in the state. The appraisal manual shall 21 be continuously revised and the manual and revisions shall be 22 issued to the county and city assessors in such form and manner 23 as prescribed by the director. The director may approve an 24 alternate appraisal manual for use by a city or county assessor 25 if the director determines that the manual is uniform and 26 consistent with the state appraisal manual. 27 Sec. 14. Section 421.30, subsection 7, Code 2009, is amended 28 to read as follows: 29 7. Any reassessment of property ordered by the director, 30 whether or not undertaken with funds provided in this section, 31 shall be conducted by the assessor in accordance with the Iowa 32 real property appraisal manual issued under authority of or an 33 approved alternate appraisal manual as described in section 34 421.17, subsection 17, the assessment laws of this state, and 35 -8- LSB 6247XC (4) 83 tw/sc 8/ 26

S.F. _____ any reassessment order issued by the director under authority 1 of this chapter. The conference board may employ appraisers 2 or other expert help to assist the assessor in completing 3 the reassessment, except that no conference board receiving 4 funds under this section shall enter into a contract for 5 the reassessment of property until the board’s proposal for 6 completing the reassessment is approved. The director shall 7 supervise the conduct of all reassessments of property and 8 issue to the assessor or conference board such instructions, 9 directives, or orders as are necessary to ensure compliance 10 with the provisions of this section and the assessment laws of 11 this state. 12 Sec. 15. Section 427B.4, Code 2009, is amended to read as 13 follows: 14 427B.4 Application for exemption by property owner. 15 1. a. An application shall be filed for each project 16 resulting in actual value added for which an exemption is 17 claimed. The first application for exemption shall be filed 18 by the owner of the property with the local assessor governing 19 body of the city or county in which the property is located by 20 February 1 of the assessment year in which the value added is 21 first assessed for taxation for which the exemption is first 22 claimed, but not later than the year in which all improvements 23 included in the project are first assessed for taxation, or the 24 following two assessment years . 25 b. Applications for exemption shall be made on forms 26 prescribed by the director of revenue and shall contain 27 information pertaining to the nature of the improvement, its 28 cost, the estimated or actual date of completion, whether 29 the exemption schedule described in section 427B.3 or an 30 alternate schedule adopted pursuant to section 427B.1 will be 31 elected, and any other information deemed necessary by the 32 director of revenue. 33 2. a. A person may submit a proposal to the city council 34 of the city or the board of supervisors of a county to receive 35 -9- LSB 6247XC (4) 83 tw/sc 9/ 26

S.F. _____ prior approval for eligibility for a tax exemption on new 1 construction. The city council or the board of supervisors, by 2 ordinance, may give its prior approval of a tax exemption for 3 new construction if the new construction is in conformance with 4 the zoning plans for the city or county. The prior approval 5 shall also be subject to the hearing requirements of section 6 427B.1. 7 b. Prior approval received under this subsection does not 8 entitle the owner to exemption from taxation until the new 9 construction has been completed and found to be qualified real 10 estate. However, if the tax exemption for new construction is 11 not approved, the person may submit an amended proposal to the 12 city council or board of supervisors to approve or reject. 13 Sec. 16. Section 441.21, subsection 1, paragraphs h and i, 14 Code Supplement 2009, are amended to read as follows: 15 h. The assessor shall determine the value of real property 16 in accordance with rules adopted by the department of revenue 17 and in accordance with either the forms and guidelines 18 contained in the real property appraisal manual prepared by the 19 department as updated from time to time or with an alternate 20 appraisal manual approved for use pursuant to section 421.17, 21 subsection 17 . Such rules, forms, and guidelines shall not 22 be inconsistent with or change the means, as provided in this 23 section, of determining the actual, market, taxable, and 24 assessed values. 25 i. (1) If the department finds that a city or county 26 assessor is not in compliance with the rules of the department 27 relating to valuation of property or has disregarded either the 28 forms and guidelines contained in the real property appraisal 29 manual or an alternate appraisal manual approved for use 30 pursuant to section 421.17, subsection 17 , the department shall 31 notify the assessor and each member of the conference board for 32 the appropriate assessing jurisdiction. The notice shall be 33 mailed by restricted certified mail. The notice shall specify 34 the areas of noncompliance and the steps necessary to achieve 35 -10- LSB 6247XC (4) 83 tw/sc 10/ 26

S.F. _____ compliance. The notice shall also inform the assessor and 1 conference board that if compliance is not achieved, a penalty 2 may be imposed. 3 (2) The conference board shall respond to the department 4 within thirty days of receipt of the notice of noncompliance. 5 The conference board may respond to the notice by asserting 6 that the assessor is in compliance with the rules, guidelines, 7 and forms of the department or by informing the department that 8 the conference board intends to submit a plan of action to 9 achieve compliance. If the conference board responds to the 10 notification by asserting that the assessor is in compliance, a 11 hearing before the director of revenue shall be scheduled on 12 the matter. 13 (3) A plan of action shall be submitted within sixty days of 14 receipt of the notice of noncompliance. The plan shall contain 15 a time frame under which compliance shall be achieved which 16 shall be no later than January 1 of the following assessment 17 year. The plan of action shall contain the signature of the 18 assessor and of the chairperson of the conference board. The 19 department shall review the plan to determine whether the plan 20 is sufficient to achieve compliance. Within thirty days of 21 receipt of the plan, the department shall notify the assessor 22 and the chairperson of the conference board that it has 23 accepted the plan or that it is necessary to submit an amended 24 plan of action. 25 (4) By January 1 of the assessment year following 26 the calendar year in which the plan was submitted to the 27 department, the conference board shall submit a report to the 28 department indicating that the plan of action was followed and 29 compliance has been achieved. The department may conduct a 30 field inspection to ensure that the assessor is in compliance. 31 By January 31, the department shall notify the assessor and the 32 conference board, by restricted certified mail, either that 33 compliance has been achieved or that the assessor remains in 34 noncompliance. If the department determines that the assessor 35 -11- LSB 6247XC (4) 83 tw/sc 11/ 26

S.F. _____ remains in noncompliance, the department shall take steps 1 to withhold up to five percent of the reimbursement payment 2 authorized in section 425.1 until the director of revenue 3 determines that the assessor is in compliance. 4 (5) If the conference board disputes the determination of 5 the department, the chairperson of the conference board may 6 appeal the determination to the state board of tax review. 7 (6) The department shall adopt rules relating to the 8 administration of this paragraph “i” . 9 Sec. 17. Section 441.21, subsection 2, Code Supplement 10 2009, is amended to read as follows: 11 2. a. In the event market value of the property being 12 assessed cannot be readily established in the foregoing manner, 13 then the assessor may determine the value of the property using 14 the other uniform and recognized appraisal methods including 15 its productive and earning capacity, if any, industrial 16 conditions, its cost, physical and functional depreciation 17 and obsolescence and replacement cost, and all other factors 18 which would assist in determining the fair and reasonable 19 market value of the property but the actual value shall not be 20 determined by use of only one such factor. 21 b. The following shall not be taken into consideration: 22 Special value or use value of the property to its present 23 owner, and the goodwill or value of a business which uses the 24 property as distinguished from the value of the property as 25 property. However, in assessing property that is rented or 26 leased to low-income individuals and families as authorized by 27 section 42 of the Internal Revenue Code, as amended, and which 28 section limits the amount that the individual or family pays 29 for the rental or lease of units in the property, the assessor 30 shall use the productive and earning capacity from the actual 31 rents received as a method of appraisal and shall take into 32 account the extent to which that use and limitation reduces the 33 market value of the property. 34 c. The assessor shall not consider any tax credit equity or 35 -12- LSB 6247XC (4) 83 tw/sc 12/ 26

S.F. _____ other subsidized financing as income provided to the property 1 in determining the assessed value. The property owner shall 2 notify the assessor when property is withdrawn from section 3 42 eligibility under the Internal Revenue Code. The property 4 shall not be subject to section 42 assessment procedures 5 for the assessment year for which section 42 eligibility is 6 withdrawn. This notification must be provided to the assessor 7 no later than March 1 of the assessment year or the owner 8 will be subject to a penalty of five hundred dollars for that 9 assessment year. The penalty shall be collected at the same 10 time and in the same manner as regular property taxes. 11 d. Upon adoption of uniform rules by the department of 12 revenue or succeeding authority covering assessments and 13 valuations of such properties, the valuation on such properties 14 shall be determined in accordance with such rules and in 15 accordance with either the forms and guidelines contained in 16 the real property appraisal manual prepared by the department 17 as updated from time to time for assessment purposes to 18 assure uniformity , but or with an alternate appraisal manual 19 approved for use pursuant to section 421.17, subsection 20 17. However, such rules, forms, and guidelines shall not be 21 inconsistent with or change the foregoing means of determining 22 the actual, market, taxable and assessed values. 23 DIVISION III 24 FINANCIAL ACCOUNT MATCHING AND DEBT COLLECTION 25 Sec. 18. Section 421.17, Code 2009, is amended by adding the 26 following new subsection: 27 NEW SUBSECTION . 27A. a. To establish a data match system. 28 b. The director may require financial institutions doing 29 business in Iowa to enter into agreements to provide the 30 information described in paragraph “c” regarding individuals 31 with accounts at financial institutions who may be subject to 32 a levy issued by the facility. 33 c. A financial institution, or its agent, shall provide on 34 a quarterly basis the following information for each individual 35 -13- LSB 6247XC (4) 83 tw/sc 13/ 26

S.F. _____ identified pursuant to paragraph “b” : 1 (1) Name. 2 (2) Address. 3 (3) Account numbers. 4 (4) Social security or tax identification number, as 5 applicable. 6 d. An agreement shall provide that the information described 7 in paragraph “c” be provided by doing one of the following: 8 (1) Using a data match system to identify individuals 9 by means of a social security or tax identification number 10 provided by the facility. 11 (2) Submitting reports containing the information described 12 in paragraph “c” on individuals identified in paragraph “b” to 13 the department. Information in such reports shall be used by 14 the department solely for purposes of collecting obligor debts. 15 e. If, based on the information provided in paragraph 16 “d” pursuant to the agreement, the facility determines that 17 an account belongs to an individual who is an obligor, the 18 facility may initiate an administrative action under section 19 421.17A to levy against the obligor’s account. 20 f. The facility shall reimburse a financial institution, 21 or its agent, for the actual and reasonable costs incurred in 22 providing the information described in paragraph “c” . For 23 purposes of this paragraph “f” , “actual and reasonable costs” 24 means either the cost of developing a data match system to 25 provide information pursuant to paragraph “d” , subparagraph 26 (1), or the cost of providing reports pursuant to paragraph “d” , 27 subparagraph (2). 28 g. Notwithstanding any other provision of law to the 29 contrary, an agreement with a financial institution pursuant 30 to this subsection shall specify a date by which the financial 31 institution shall submit a claim for reimbursement pursuant to 32 paragraph “f” . 33 h. This subsection shall not be construed to preclude a 34 financial institution from doing either of the following: 35 -14- LSB 6247XC (4) 83 tw/sc 14/ 26

S.F. _____ (1) Recouping a deposit made to an individual’s account, if 1 the financial institution is lawfully entitled to do so. 2 (2) Collecting standard or contractual account activity 3 fees to the extent such fees are necessary to maintain the 4 account during any period in which access to the account is 5 blocked or encumbered. 6 i. The information provided by a financial institution, 7 or its agent, under this subsection shall be confidential and 8 shall be available only to the department and the facility for 9 use in levy collection activities. 10 j. A financial institution, or its agent, providing the 11 information described in this subsection shall not be held 12 liable for either of the following: 13 (1) Blocking access to or surrendering an individual’s 14 assets in response to a levy action under this subsection. 15 (2) Any other action taken in good faith to comply with the 16 requirements of this subsection. 17 k. This subsection shall not be construed to preclude 18 the department from encumbering an obligor’s account with a 19 financial institution by another available means or provision 20 of law. 21 l. The director shall adopt rules for the administration 22 of this subsection. The rules shall specify an implementation 23 plan for the data match system. The plan, to the extent 24 practicable, shall reflect the practices and capabilities of 25 similar systems utilized by private entities or government 26 agencies. 27 m. As used in this subsection, unless the context otherwise 28 requires: 29 (1) “Data match system” means an automated process for 30 matching and comparing obligor information from the centralized 31 debt collection data bank described in subsection 27 with 32 account information from financial institutions. 33 (2) The terms “account” , “bank” , “credit union” , “facility” , 34 “financial institution” , “obligor” , and “savings and loan 35 -15- LSB 6247XC (4) 83 tw/sc 15/ 26

S.F. _____ association” have the same meaning as defined in section 1 421.17A, subsection 1. 2 DIVISION IV 3 IDENTIFICATION OF WORKER MISCLASSIFICATION 4 Sec. 19. Section 421.17, Code 2009, is amended by adding the 5 following new subsection: 6 NEW SUBSECTION . 31. To assist the department of workforce 7 development in identifying taxpayers who have failed to 8 file a return or to pay the taxes, penalties, or interest 9 required pursuant to any of the tax provisions administered 10 by the department of workforce development. In assisting the 11 department of workforce development, and notwithstanding any 12 provisions to the contrary in sections 422.20 and 422.72, the 13 director is authorized to provide the following information for 14 purposes of identifying such taxpayers: 15 a. Withholding tax and payroll information. 16 b. The identity, including the date of birth and social 17 security number, of any taxpayer who has previously been or is 18 currently being audited or investigated by the department. 19 c. The result or most recent status of the audit or 20 investigation. 21 Sec. 20. Section 422.20, subsection 3, paragraph a, Code 22 2009, is amended to read as follows: 23 a. Unless otherwise expressly permitted by section 8A.504, 24 section 96.11, subsection 6, section 421.17, subsections 22, 25 23, and 26, and 31, sections 252B.9, 321.120, 421.19, 421.28, 26 422.72, and 452A.63, and this section, a tax return, return 27 information, or investigative or audit information shall not 28 be divulged to any person or entity, other than the taxpayer, 29 the department, or internal revenue service for use in a matter 30 unrelated to tax administration. 31 Sec. 21. Section 422.72, subsection 3, paragraph a, Code 32 2009, is amended to read as follows: 33 a. Unless otherwise expressly permitted by section 8A.504, 34 section 96.11, subsection 6, section 421.17, subsections 22, 35 -16- LSB 6247XC (4) 83 tw/sc 16/ 26

S.F. _____ 23, and 26, and 31, sections 252B.9, 321.120, 421.19, 421.28, 1 422.20, and 452A.63, and this section, a tax return, return 2 information, or investigative or audit information shall not 3 be divulged to any person or entity, other than the taxpayer, 4 the department, or internal revenue service for use in a matter 5 unrelated to tax administration. 6 Sec. 22. EFFECTIVE UPON ENACTMENT. This division of this 7 Act, being deemed of immediate importance, takes effect upon 8 enactment. 9 DIVISION V 10 FALSE CLAIMS FOR CREDIT 11 Sec. 23. Section 421.27, subsection 6, Code 2009, is amended 12 to read as follows: 13 6. Improper receipt of refund or credit. A person who makes 14 an erroneous application for refund or credit shall be liable 15 for any overpayment received or tax liability reduced plus 16 interest at the rate in effect under section 421.7. In 17 addition, a person who willfully makes a false or frivolous 18 application for refund or credit with intent to evade tax 19 or with intent to receive a refund or credit to which the 20 person is not entitled is guilty of a fraudulent practice 21 and is liable for a penalty equal to seventy-five percent of 22 the refund or credit being claimed. Repayments Payments , 23 penalties, and interest due under this subsection may be 24 collected and enforced in the same manner as the tax imposed. 25 DIVISION VI 26 REFUND INTEREST ACCRUAL 27 Sec. 24. Section 421.60, subsection 2, paragraph e, Code 28 2009, is amended to read as follows: 29 e. Unless otherwise provided by law, all Iowa taxes which 30 are administered by the department and which result in a refund 31 shall accrue interest at the rate in effect under section 421.7 32 from the first day of the second third calendar month following 33 the date of payment or the date the return was due to be filed 34 or was filed, whichever is the latest. 35 -17- LSB 6247XC (4) 83 tw/sc 17/ 26

S.F. _____ Sec. 25. Section 422.16, subsection 9, Code 2009, is amended 1 to read as follows: 2 9. a. The amount of any overpayment of the individual 3 income tax liability of the employee taxpayer, nonresident, 4 or other person which may result from the withholding and 5 payment of withheld tax by the employer or withholding agent 6 to the department under subsections 1 and 12, as compared to 7 the individual income tax liability of the employee taxpayer, 8 nonresident, or other person properly and correctly determined 9 under the provisions of section 422.4, to and including section 10 422.25, may be credited against any income tax or installment 11 thereof then due the state of Iowa and any balance of one 12 dollar or more shall be refunded to the employee taxpayer, 13 nonresident or other person with interest at the rate in 14 effect under section 421.7 for each month or fraction of a 15 month, the interest to begin to accrue on the first day of the 16 second third calendar month following the date the return was 17 due to be filed or was filed, whichever is the later date. 18 b. Amounts of less than one dollar shall be refunded to 19 the taxpayer, nonresident, or other person only upon written 20 application, in accordance with section 422.73, and only if 21 the application is filed within twelve months after the due 22 date of the return. Refunds in the amount of one dollar 23 or more provided for by this subsection shall be paid by 24 the treasurer of state by warrants drawn by the director of 25 the department of administrative services, or an authorized 26 employee of the department, and the taxpayer’s return of 27 income shall constitute a claim for refund for this purpose, 28 except in respect to amounts of less than one dollar. There 29 is appropriated, out of any funds in the state treasury not 30 otherwise appropriated, a sum sufficient to carry out the 31 provisions of this subsection. 32 Sec. 26. Section 422.25, subsection 3, Code 2009, is amended 33 to read as follows: 34 3. If the amount of the tax as determined by the department 35 -18- LSB 6247XC (4) 83 tw/sc 18/ 26