House File 2471 - Introduced HOUSE FILE 2471 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2430) A BILL FOR An Act relating to the Iowa individual income tax checkoffs by 1 modifying the Iowa election campaign income tax checkoff and 2 providing for the future repeal of the checkoff, by creating 3 an income tax checkoff for the reduction of food insecurity 4 within this state and providing for the future repeal of 5 the checkoff, making an appropriation, creating a study 6 committee, and including effective date provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 5872HV (3) 85 mm/sc

H.F. 2471 DIVISION I 1 INCOME TAX CHECKOFF FOR IOWA CHECK OFF HUNGER FUND 2 Section 1. NEW SECTION . 231.67 Iowa check off hunger fund. 3 1. An Iowa check off hunger fund is created in the state 4 treasury under the control of the department. The fund is 5 composed of moneys appropriated or available to and obtained 6 or accepted by the treasurer of state for deposit in the fund. 7 The fund shall include moneys transferred to the fund pursuant 8 to an income tax checkoff provided in chapter 422, division II, 9 if applicable. Notwithstanding section 12C.7, subsection 2, 10 interest or earnings on moneys in the fund shall be credited to 11 and remain in the fund. Section 8.33 does not apply to moneys 12 in the fund. 13 2. Moneys in the fund are appropriated to the department 14 to provide grants to persons to be used for the purpose of 15 reducing food insecurity within the state. The grants shall 16 be awarded as follows: 17 a. Forty percent of the moneys in the fund shall be 18 awarded to a nonprofit, tax-exempt association, chosen by the 19 department, that receives donations under section 170 of the 20 Internal Revenue Code and whose members include Iowa food 21 banks and their affiliates that together serve all counties 22 in the state, to be used to purchase food for distribution to 23 food-insecure Iowans. 24 b. Fifty percent of the moneys in the fund shall be awarded 25 to each area agency on aging designated under section 231.32 in 26 the proportion that the estimated amount of older individuals 27 in Iowa served by that area agency on aging bears to the 28 total estimated amount of older individuals in Iowa, to be 29 used to provide congregate meals and home-delivered meals to 30 food-insecure older individuals in Iowa. 31 c. Ten percent of the moneys in the fund shall be awarded to 32 persons who are using innovative ways to reduce food insecurity 33 in this state. To be eligible to receive a grant pursuant to 34 this paragraph “c” , a person shall apply to the department 35 -1- LSB 5872HV (3) 85 mm/sc 1/ 10

H.F. 2471 in the manner prescribed by the department. In reviewing 1 applications and making grants pursuant to this paragraph “c” , 2 the department may consider any factors the department deems 3 appropriate. 4 3. The department shall adopt rules to administer the Iowa 5 check off hunger fund. 6 Sec. 2. NEW SECTION . 422.12I Income tax checkoff for Iowa 7 check off hunger fund. 8 1. Notwithstanding section 422.12E, for the tax year 9 beginning in the 2014 calendar year, a person who files an 10 individual or a joint income tax return with the department 11 of revenue under section 422.13 may designate one dollar or 12 more to be paid to the Iowa check off hunger fund created in 13 section 231.67. If the refund due on the return or the payment 14 remitted with the return is insufficient to pay the additional 15 amount designated by the taxpayer to the Iowa check off hunger 16 fund, the amount designated shall be reduced to the remaining 17 amount of refund or the remaining amount remitted with the 18 return. The designation of a contribution to the Iowa check 19 off hunger fund under this section is irrevocable. 20 2. The director of revenue shall draft the 2014 income 21 tax form to allow the designation of contributions to the 22 Iowa check off hunger fund on the tax return. The department 23 of revenue shall transfer the total amount designated on the 24 2014 tax return forms to the Iowa check off hunger fund. 25 However, before a checkoff pursuant to this section shall be 26 permitted, all liabilities on the books of the department of 27 administrative services and accounts identified as owing under 28 section 8A.504 and the political contribution allowed under 29 section 68A.601 shall be satisfied. 30 3. The department on aging may authorize payment of moneys 31 from the Iowa check off hunger fund, in accordance with section 32 231.67. 33 4. The department of revenue shall adopt rules to administer 34 this section. 35 -2- LSB 5872HV (3) 85 mm/sc 2/ 10

H.F. 2471 5. This section is repealed January 1, 2015. 1 DIVISION II 2 IOWA ELECTION CAMPAIGN FUND TAX CHECKOFF 3 Sec. 3. Section 68A.601, Code 2014, is amended to read as 4 follows: 5 68A.601 Checkoff —— income tax. 6 A For tax years beginning before January 1, 2014, a person 7 whose state income tax liability for any taxable year is one 8 dollar and fifty cents or more may direct that one dollar and 9 fifty cents of that liability be paid over to the Iowa election 10 campaign fund when submitting the person’s state income tax 11 return to the department of revenue. In the case of a joint 12 return of husband and wife having a state income tax liability 13 of three dollars or more, each spouse may direct that one 14 dollar and fifty cents be paid to the fund. The For tax years 15 beginning before January 1, 2014, the director of revenue shall 16 draft the income tax form to provide spaces on the tax return 17 which the taxpayer may use to designate that contributions made 18 under this section be credited to a specified political party 19 as defined by section 43.2 , or to the Iowa election campaign 20 fund as a contribution to be shared by all such political 21 parties in the manner prescribed by section 68A.602 . The form 22 shall inform the taxpayer of the consequences of the choices 23 provided under this section , but this information may be 24 contained in a footnote or other suitable form if the director 25 of revenue finds it is not feasible to place the information 26 immediately above the signature line. The action taken by a 27 person for the checkoff is irrevocable. 28 Sec. 4. Section 422.12J, Code 2014, is amended to read as 29 follows: 30 422.12J Income tax checkoff for Iowa election campaign fund. 31 A For tax years beginning before January 1, 2014, a person 32 who files an individual or a joint income tax return with 33 the department of revenue under section 422.13 may designate 34 a contribution to the Iowa election campaign fund authorized 35 -3- LSB 5872HV (3) 85 mm/sc 3/ 10

H.F. 2471 pursuant to section 68A.601 . 1 DIVISION III 2 FUTURE REPEAL OF IOWA ELECTION CAMPAIGN FUND TAX CHECKOFF 3 Sec. 5. Section 68A.103, subsection 2, Code 2014, is amended 4 by striking the subsection. 5 Sec. 6. Section 97B.3, subsection 2, Code 2014, is amended 6 to read as follows: 7 2. The qualifications for appointment as the chief 8 executive officer shall include management-level pension 9 fund administration experience. The qualifications for 10 appointment as the chief executive officer shall also 11 include a demonstrated knowledge of all aspects of pension 12 fund administration, including financial management, 13 investment asset management, benefit design and delivery, 14 legal administration, and operations administration. The 15 chief executive officer shall not be selected on the basis 16 of political affiliation, and while employed as the chief 17 executive officer, shall not be a member of a political 18 committee, participate in a political campaign, or be a 19 candidate for a partisan elective office, and shall not 20 contribute to a political campaign fund, except that the chief 21 executive officer may designate on the checkoff portion of the 22 state or federal income tax return , or both, a party or parties 23 to which a contribution is made pursuant to the checkoff. The 24 chief executive officer shall not hold any other office under 25 the laws of the United States or of this or any state and shall 26 devote full time to the duties of office. 27 Sec. 7. Section 422.12D, subsection 4, Code 2014, is amended 28 to read as follows: 29 4. The department shall adopt rules to implement this 30 section . However, before a checkoff pursuant to this section 31 shall be permitted, all liabilities on the books of the 32 department of administrative services and accounts identified 33 as owing under section 8A.504 and the political contribution 34 allowed under section 68A.601 shall be satisfied. 35 -4- LSB 5872HV (3) 85 mm/sc 4/ 10

H.F. 2471 Sec. 8. Section 422.12E, subsection 1, Code 2014, is amended 1 to read as follows: 2 1. For tax years beginning on or after January 1, 2004, 3 there shall be allowed no more than four income tax return 4 checkoffs on each income tax return. When the same four income 5 tax return checkoffs have been provided on the income tax 6 return for two consecutive years, the two checkoffs for which 7 the least amount has been contributed, in the aggregate for the 8 first tax year and through March 15 of the second tax year, are 9 repealed. This section does not apply to the income tax return 10 checkoff provided in section 68A.601 . 11 Sec. 9. Section 422.12K, subsection 2, Code 2014, is amended 12 to read as follows: 13 2. The director of revenue shall draft the income tax form 14 to allow the designation of contributions to the child abuse 15 prevention program fund on the tax return. The department of 16 revenue, on or before January 31, shall transfer the total 17 amount designated on the tax return forms due in the preceding 18 calendar year to the child abuse prevention program fund. 19 However, before a checkoff pursuant to this section shall be 20 permitted, all liabilities on the books of the department of 21 administrative services and accounts identified as owing under 22 section 8A.504 and the political contribution allowed under 23 section 68A.601 shall be satisfied. 24 Sec. 10. Section 422.12L, subsection 2, Code 2014, is 25 amended to read as follows: 26 2. The director of revenue shall draft the income tax form 27 to allow the designation of contributions to the veterans trust 28 fund and to the volunteer fire fighter preparedness fund as 29 one checkoff on the tax return. The department of revenue, 30 on or before January 31, shall transfer one-half of the total 31 amount designated on the tax return forms due in the preceding 32 calendar year to the veterans trust fund and the remaining 33 one-half to the volunteer fire fighter preparedness fund. 34 However, before a checkoff pursuant to this section shall be 35 -5- LSB 5872HV (3) 85 mm/sc 5/ 10

H.F. 2471 permitted, all liabilities on the books of the department of 1 administrative services and accounts identified as owing under 2 section 8A.504 and the political contribution allowed under 3 section 68A.601 shall be satisfied. 4 Sec. 11. Section 456A.16, unnumbered paragraph 7, Code 5 2014, is amended to read as follows: 6 The department shall adopt rules to implement this section . 7 However, before a checkoff pursuant to this section shall be 8 permitted, all liabilities on the books of the department of 9 administrative services and accounts identified as owing under 10 section 8A.504 and the political contribution allowed under 11 section 68A.601 shall be satisfied. 12 Sec. 12. Section 474.10, Code 2014, is amended to read as 13 follows: 14 474.10 General counsel. 15 The board shall employ a competent attorney to serve as its 16 general counsel, and assistants to the general counsel as it 17 finds necessary for the full and efficient discharge of its 18 duties. The general counsel is the attorney for, and legal 19 advisor of, the board and is exempt from the merit system 20 provisions of chapter 8A, subchapter IV . Assistants to the 21 general counsel are subject to the merit system provisions of 22 chapter 8A, subchapter IV . The general counsel or an assistant 23 to the general counsel shall provide the necessary legal advice 24 to the board in all matters and represent the board in all 25 actions instituted in a state or federal court challenging 26 the validity of a rule or order of the board. The existence 27 of a fact which disqualifies a person from election or from 28 acting as a utilities board member disqualifies the person from 29 employment as general counsel or assistant general counsel. 30 The general counsel shall devote full time to the duties of the 31 office. During employment the counsel shall not be a member of 32 a political committee, contribute to a political campaign fund 33 other than through the income tax checkoff for contributions to 34 the Iowa election campaign fund and the presidential election 35 -6- LSB 5872HV (3) 85 mm/sc 6/ 10

H.F. 2471 campaign fund, participate in a political campaign, or be a 1 candidate for a political office. 2 Sec. 13. Section 475A.1, subsection 4, Code 2014, is amended 3 to read as follows: 4 4. Political activity prohibited. The consumer advocate 5 shall devote the advocate’s entire time to the duties of the 6 office; and during the advocate’s term of office the advocate 7 shall not be a member of a political committee or contribute 8 to a political campaign fund other than through the income tax 9 checkoff for contributions to the Iowa election campaign fund 10 and the presidential election campaign fund or take part in 11 political campaigns or be a candidate for a political office. 12 Sec. 14. Section 904.107, Code 2014, is amended to read as 13 follows: 14 904.107 Director —— appointment and qualifications. 15 The chief administrative officer for the department is the 16 director. The director shall be appointed by the governor 17 subject to confirmation by the senate and shall serve at the 18 pleasure of the governor. The director shall be qualified 19 in reformatory and prison management, knowledgeable in 20 community-based corrections, and shall possess administrative 21 ability. The director shall also have experience in the field 22 of criminology and discipline and in the supervision of inmates 23 in corrective penal institutions. The director shall not be 24 selected on the basis of political affiliation, and while 25 employed as the director, shall not be a member of a political 26 committee, participate in a political campaign, be a candidate 27 for a partisan elective office, and shall not contribute to a 28 political campaign fund, except that the director may designate 29 on the checkoff portion of the state or federal income tax 30 return , or both, a party or parties to which a contribution is 31 made pursuant to the checkoff. The director shall not hold any 32 other office under the laws of the United States or of this or 33 any state or hold any position for profit and shall devote full 34 time to the duties of office. 35 -7- LSB 5872HV (3) 85 mm/sc 7/ 10

H.F. 2471 Sec. 15. REPEAL. Sections 68A.601, 68A.602, 68A.603, 1 68A.604, 68A.605, 68A.606, 68A.607, 68A.608, 68A.609, and 2 422.12J, Code 2014, are repealed. 3 Sec. 16. EFFECTIVE DATE. This division of this Act takes 4 effect July 1, 2015. 5 DIVISION IV 6 STUDY COMMITTEE 7 Sec. 17. INCOME TAX CHECKOFF STUDY COMMITTEE. 8 1. The legislative council is requested to establish an 9 income tax checkoff study committee. The objective of the 10 study committee shall be to review the use and effectiveness of 11 individual income tax checkoffs in Iowa, and the desirability 12 for making changes to the number, type, or administration of 13 the individual income tax checkoffs. 14 2. The study committee shall meet during the 2014 15 legislative interim. The study committee shall submit a report 16 and recommendations to the general assembly by January 1, 2015. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill relates to Iowa individual income tax checkoffs. 21 Division I of the bill provides that taxpayers filing a 2014 22 individual income tax return will be allowed to designate $1 or 23 more on the return to be paid to the Iowa check off hunger fund. 24 The checkoff is repealed January 1, 2015. The division creates 25 the Iowa check off hunger fund in the state treasury under the 26 control of the department on aging. The division requires 27 the department of revenue to remit moneys collected from the 28 checkoff to the fund. Moneys in the fund are appropriated to 29 the department on aging and shall be used to provide grants 30 to specified entities and other persons to be used for the 31 purpose of reducing food insecurity in the state. The division 32 provides rules for the distribution of the grants. Forty 33 percent of the moneys in the fund are required to be awarded 34 to a nonprofit association, chosen by the department on aging, 35 -8- LSB 5872HV (3) 85 mm/sc 8/ 10

H.F. 2471 whose members include Iowa food banks and their affiliates 1 that together serve all counties in the state, to be used to 2 purchase food for distribution to food-insecure Iowans. Fifty 3 percent of the moneys in the fund are required to be awarded 4 to each area agency on aging designated under Code section 5 231.32 in the proportion that the estimated amount of older 6 individuals in Iowa served by that area agency on aging bears 7 to the total estimated amount of older individuals in Iowa, to 8 be used to provide congregate meals and home-delivered meals to 9 food-insecure older individuals in Iowa. Ten percent of the 10 moneys in the fund are required to be awarded to persons who 11 are using innovative ways to reduce food insecurity in this 12 state and who make an application to the department on aging 13 for such a grant. 14 The division provides that the checkoff is not subject to 15 Code section 422.12E. Code section 422.12E allows no more than 16 four checkoffs on the individual tax return form and provides 17 for the automatic repeal of the two checkoffs receiving the 18 least in contributions over a two-year period. 19 Divisions II and III relate to the Iowa election campaign 20 income tax checkoff and the Iowa election campaign fund. 21 CURRENT LAW. The Iowa election campaign tax checkoff allows 22 individuals to designate on their income tax return up to $1.50 23 of their state tax liability to the Iowa election campaign 24 fund. The checkoff is not subject to the provisions of Code 25 section 422.12E. 26 Moneys in the Iowa election campaign fund, consisting of 27 a separate fund for each political party, are disbursed to 28 candidates for partisan public office at the request of the 29 candidate and at the discretion of the state central committee 30 of each political party. The Iowa ethics and campaign 31 disclosure board is responsible for administering the Iowa 32 election campaign fund. Any moneys not used by the political 33 parties by the end of a general election year revert to the 34 general fund of the state. 35 -9- LSB 5872HV (3) 85 mm/sc 9/ 10

H.F. 2471 Division II of the bill restricts the Iowa election 1 campaign income tax checkoff to tax years beginning before 2 January 1, 2014. The checkoff will not be available on the 3 individual income tax return for tax year 2014, nor any tax 4 year thereafter. 5 Division III of the bill provides that the Iowa election 6 campaign income tax checkoff and the Iowa election campaign 7 fund are repealed effective July 1, 2015. 8 Division IV requests the legislative council to establish 9 an income tax checkoff study committee to meet during the 2014 10 legislative interim and review the use and effectiveness of 11 individual income tax checkoffs in Iowa, and the desirability 12 for making changes to their number, type, or administration. 13 The study committee is required to submit a report and 14 recommendations to the general assembly by January 1, 2015. 15 -10- LSB 5872HV (3) 85 mm/sc 10/ 10