SSB 1204 (LSB 2470XC (3) 85)

SENATE FILE _____

BY  (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON BOWMAN)

A BILL FOR

An Act concerning vehicle registration fees, including matters relating to evasion of fees and to fees for electric vehicles, providing penalties, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.55, Code 2013, is amended to read as follows:
   321.55  Registration and financial liability coverage required for certain vehicles owned or operated by nonresidents.
   1.  A nonresident owner or operator engaged in remunerative employment within the
 
this state or carrying on business within the
 
this state and owning or operating a motor vehicle, trailer, or semitrailer within the
 
this state shall register and maintain financial liability coverage as required under section 321.20B for each vehicle and pay the same fees for registration as are paid for like vehicles owned by residents of this state. However, this paragraph
 
subsection does not apply to a person commuting from the person’s residence in another state or whose employment is seasonal or temporary, not exceeding ninety days.
   2.
  a.  A nonresident owner of a motor vehicle operated within the
 
this state by a resident of the
 
this state shall register the vehicle and shall maintain financial liability coverage as required under section 321.20B for the vehicle. The nonresident owner shall pay the same fees for registration as are paid for like vehicles owned by residents of this state. However, registration under this paragraph is not required for vehicles being operated by residents temporarily, not exceeding
 
for not more than ninety days.

For purposes of this paragraph, a vehicle is not operated in the state temporarily, and is therefore subject to registration and the owner is required to pay the applicable fees, if the vehicle is located in Iowa for more than ninety consecutive or nonconsecutive days and is operated on an Iowa highway by an Iowa resident during that time. It is unlawful for a resident to operate within the state an unregistered motor vehicle required to be registered under this paragraph.

The ninety-day temporary period of operation provided for under this paragraph does not apply to a vehicle owned by a shell business as provided in paragraph “b”.
   b.  On or after July 1, 2013, if the department, in consultation with the department of revenue, determines that the nonresident owner of a vehicle is a partnership, limited liability company, or corporation that is a shell business, it shall be rebuttably presumed that the Iowa resident in control of the vehicle is the actual owner of the vehicle, that the vehicle is subject to registration in this state, and that payment of the fee for new registration for the vehicle is owed by the Iowa resident.
   (1)  Factors which indicate that a partnership, limited liability company, or corporation is a shell business include but are not limited to the following:
   (a)  The partnership, limited liability company, or corporation lacks a specific business activity or purpose.
   (b)  The partnership, limited liability company, or corporation fails to maintain a physical location in the foreign state.
   (c)  The partnership, limited liability company, or corporation fails to employ individual persons and provide those persons with internal revenue service form W-2 wage and tax statements.
   (d)  The partnership, limited liability company, or corporation fails to file federal tax returns, or fails to file a required state tax return in the foreign state.
   (2)  Factors which indicate that a person is in control of a vehicle include but are not limited to the following:
   (a)  The person was the initial purchaser of the vehicle.
   (b)  The person operated or stored the vehicle in Iowa for any period of time.
   (c)  The person is a partner, member, or shareholder of the nonresident partnership, limited liability company, or corporation that purports to be the owner of the vehicle.
   (d)  The person is insured to drive the vehicle.
   (3)  If the department determines that the nonresident owner of a vehicle is a shell business, the department shall notify the Iowa resident in control of the vehicle in writing that the Iowa resident is required to obtain an Iowa certificate of title and registration for the vehicle and pay the fee for new registration owed for the vehicle not later than thirty days from the date of the notice.
    Sec. 2.  Section 321.105A, subsection 7, Code 2013, is amended to read as follows:
   7.  Penalty for false statement
 
or evasion of fee.
   a.  A person who willfully makes a false statement in regard to the purchase price of a vehicle subject to a fee for new registration
 
or willfully attempts in any manner to evade payment of the fee required by 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 payment of the fee for new registration
 
or willfully attempts in any manner to evade payment of the fee required by this section shall be assessed a penalty of seventy-five percent of the amount of the fee unpaid and required to be paid on the actual purchase price less trade-in allowance.
   b.  An Iowa resident found to be in control of a vehicle which is owned by a shell business and for which the fee for new registration has not been paid, as provided in section 321.55, subsection 2, is guilty of a fraudulent practice. An Iowa resident found to be in control of a vehicle which is owned by a shell business and for which the fee for new registration has not been paid, as provided in section 321.55, subsection 2, shall be assessed a penalty of seventy-five percent of the amount of the fee unpaid and required to be paid on the actual purchase price less trade-in allowance.
    Sec. 3.  REPEAL.  Section 321.116, Code 2013, is repealed.
    Sec. 4.  APPLICABILITY —— PRIOR ELECTRIC VEHICLE REGISTRATIONS.
   1.  Except as provided in subsection 2, the section of this Act that repeals section 321.116 applies to the registration of electric motor vehicles for registration years beginning on or after January 1, 2014.
   2.  For an annual renewal of registration for an electric motor vehicle which was registered to the same owner for a registration year beginning prior to January 1, 2014, the annual registration fee shall be according to the terms of section 321.116, Code 2013.
EXPLANATION
   This bill contains provisions relating to collection of the fee for new registration from vehicle owners who attempt to evade payment of the fee, including resident owners who establish a shell business in another state. In addition, the bill provides for annual registration fees for electric vehicles based on the weight and value of the vehicle.
   Under current law, the nonresident owner of a motor vehicle which is operated within this state by a resident of this state must register the vehicle in Iowa and pay the same fees required for registration of a vehicle by a resident owner. However, registration is not required for a vehicle owned by a nonresident and operated in this state by an Iowa resident for a temporary period of not more than 90 days. The bill provides that if a vehicle owned by a nonresident is located in Iowa for more than 90 consecutive or nonconsecutive days and is operated by an Iowa resident during that time, the vehicle is not considered to be in the state temporarily.
   The bill provides that on or after July 1, 2013, if the department of transportation, in consultation with the department of revenue, determines that the nonresident owner of a vehicle is a partnership, limited liability company, or corporation that is a shell business, there is a rebuttable presumption that the Iowa resident in control of the vehicle is the actual owner of the vehicle, that the vehicle is subject to registration in this state, and that the fee for new registration for the vehicle is owed by the Iowa resident. The 90-day grace period does not apply to such a vehicle, and the department of transportation shall notify the Iowa resident in control of the vehicle of the requirement to obtain a certificate of title and registration for the vehicle and pay the applicable fee for registration within 30 days of the date of the notice. The bill lists factors that identify a shell business, including but not limited to lacking a specific business activity or purpose, failing to maintain a physical location in the foreign jurisdiction, failing to employ individuals and issue federal W-2 forms, and failing to file federal or state tax returns. Factors used to identify the person in control of the vehicle include that the person was the original purchaser of the vehicle; that the person operated or stored the vehicle in Iowa for any period of time; that the person is a partner, member, or shareholder of the nonresident partnership, limited liability company, or corporation that purports to be the owner of the vehicle; or that the person is insured to operate the vehicle.
   The bill provides that a person who willfully attempts to evade payment of the fee for new registration is guilty of a fraudulent practice. The bill also provides that a person who is found to be in control of a vehicle that is owned by a shell business and for which the fee for new registration is unpaid is guilty of a fraudulent practice. In addition to any criminal penalty, the person shall be assessed a penalty of 75 percent of the amount of the fee unpaid and required to be paid. These are the same penalties that apply for making a false statement in regard to the purchase price of a vehicle subject to the fee for new registration.
   Code section 321.116, which establishes an annual registration fee of $25 for an electric motor vehicle up to five model years old and a fee of $15 thereafter, is repealed. As a result, electric motor vehicles will be subject to registration fees based on the weight and value of the vehicle. The change applies for registration years beginning on or after January 1, 2014. However, current fees will continue to apply to registration renewals for electric motor vehicles registered to the same owner for a registration year beginning prior to January 1, 2014.