House File 144 - Introduced HOUSE FILE 144 BY JORGENSEN A BILL FOR An Act relating to state and local funding for transportation 1 by increasing the rate of the excise taxes on motor fuel 2 and certain special fuel, providing for the deposit in the 3 road use tax fund of certain wagering tax receipts and 4 revenues from city automated traffic enforcement systems, 5 and requiring the department of transportation to implement 6 efficiency measures and to prioritize certain primary 7 highway projects. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 1468YH (4) 86 ns/sc

H.F. 144 DIVISION I 1 MOTOR FUEL EXCISE TAX 2 Section 1. Section 452A.3, subsection 1, unnumbered 3 paragraph 1, Code 2015, is amended to read as follows: 4 Except as otherwise provided in this section and in this 5 division , until June 30, 2015 2017 , this subsection shall apply 6 to the excise tax imposed on each gallon of motor fuel used for 7 any purpose for the privilege of operating motor vehicles in 8 this state. 9 Sec. 2. Section 452A.3, subsection 1, paragraph b, Code 10 2015, is amended to read as follows: 11 b. The For the period beginning July 1, 2015, and ending 12 June 30, 2016, the rate for the excise tax shall be as follows: 13 (1) If the distribution percentage is not greater than 14 fifty percent, the rate shall be nineteen twenty-two cents for 15 ethanol blended gasoline and twenty twenty-three cents for 16 motor fuel other than ethanol blended gasoline. 17 (2) If the distribution percentage is greater than fifty 18 percent but not greater than fifty-five percent, the rate shall 19 be nineteen twenty-two cents for ethanol blended gasoline and 20 twenty twenty-three and one-tenth cents for motor fuel other 21 than ethanol blended gasoline. 22 (3) If the distribution percentage is greater than 23 fifty-five percent but not greater than sixty percent, the rate 24 shall be nineteen twenty-two cents for ethanol blended gasoline 25 and twenty twenty-three and three-tenths cents for motor fuel 26 other than ethanol blended gasoline. 27 (4) If the distribution percentage is greater than sixty 28 percent but not greater than sixty-five percent, the rate shall 29 be nineteen twenty-two cents for ethanol blended gasoline and 30 twenty twenty-three and five-tenths cents for motor fuel other 31 than ethanol blended gasoline. 32 (5) If the distribution percentage is greater than 33 sixty-five percent but not greater than seventy percent, the 34 rate shall be nineteen twenty-two cents for ethanol blended 35 -1- LSB 1468YH (4) 86 ns/sc 1/ 11

H.F. 144 gasoline and twenty twenty-three and seven-tenths cents for 1 motor fuel other than ethanol blended gasoline. 2 (6) If the distribution percentage is greater than seventy 3 percent but not greater than seventy-five percent, the rate 4 shall be nineteen twenty-two cents for ethanol blended gasoline 5 and twenty-one twenty-four cents for motor fuel other than 6 ethanol blended gasoline. 7 (7) If the distribution percentage is greater than 8 seventy-five percent but not greater than eighty percent, 9 the rate shall be nineteen twenty-two and three-tenths cents 10 for ethanol blended gasoline and twenty twenty-three and 11 eight-tenths cents for motor fuel other than ethanol blended 12 gasoline. 13 (8) If the distribution percentage is greater than eighty 14 percent but not greater than eighty-five percent, the rate 15 shall be nineteen twenty-two and five-tenths cents for ethanol 16 blended gasoline and twenty twenty-three and seven-tenths cents 17 for motor fuel other than ethanol blended gasoline. 18 (9) If the distribution percentage is greater than 19 eighty-five percent but not greater than ninety percent, the 20 rate shall be nineteen twenty-two and seven-tenths cents 21 for ethanol blended gasoline and twenty twenty-three and 22 four-tenths cents for motor fuel other than ethanol blended 23 gasoline. 24 (10) If the distribution percentage is greater than ninety 25 percent but not greater than ninety-five percent, the rate 26 shall be nineteen twenty-two and nine-tenths cents for ethanol 27 blended gasoline and twenty twenty-three and one-tenth cents 28 for motor fuel other than ethanol blended gasoline. 29 (11) If the distribution percentage is greater than 30 ninety-five percent, the rate shall be twenty twenty-three 31 cents for ethanol blended gasoline and twenty twenty-three 32 cents for motor fuel other than ethanol blended gasoline. 33 Sec. 3. Section 452A.3, subsection 1, Code 2015, is amended 34 by adding the following new paragraph: 35 -2- LSB 1468YH (4) 86 ns/sc 2/ 11

H.F. 144 NEW PARAGRAPH . c. For the period beginning July 1, 2016, 1 and ending June 30, 2017, the rate for the excise tax shall be 2 as follows: 3 (1) If the distribution percentage is not greater than 4 fifty percent, the rate shall be twenty-five cents for ethanol 5 blended gasoline and twenty-six cents for motor fuel other than 6 ethanol blended gasoline. 7 (2) If the distribution percentage is greater than fifty 8 percent but not greater than fifty-five percent, the rate 9 shall be twenty-five cents for ethanol blended gasoline and 10 twenty-six and one-tenth cents for motor fuel other than 11 ethanol blended gasoline. 12 (3) If the distribution percentage is greater than 13 fifty-five percent but not greater than sixty percent, the rate 14 shall be twenty-five cents for ethanol blended gasoline and 15 twenty-six and three-tenths cents for motor fuel other than 16 ethanol blended gasoline. 17 (4) If the distribution percentage is greater than sixty 18 percent but not greater than sixty-five percent, the rate 19 shall be twenty-five cents for ethanol blended gasoline and 20 twenty-six and five-tenths cents for motor fuel other than 21 ethanol blended gasoline. 22 (5) If the distribution percentage is greater than 23 sixty-five percent but not greater than seventy percent, the 24 rate shall be twenty-five cents for ethanol blended gasoline 25 and twenty-six and seven-tenths cents for motor fuel other than 26 ethanol blended gasoline. 27 (6) If the distribution percentage is greater than seventy 28 percent but not greater than seventy-five percent, the rate 29 shall be twenty-five cents for ethanol blended gasoline and 30 twenty-seven cents for motor fuel other than ethanol blended 31 gasoline. 32 (7) If the distribution percentage is greater than 33 seventy-five percent but not greater than eighty percent, the 34 rate shall be twenty-five and three-tenths cents for ethanol 35 -3- LSB 1468YH (4) 86 ns/sc 3/ 11

H.F. 144 blended gasoline and twenty-six and eight-tenths cents for 1 motor fuel other than ethanol blended gasoline. 2 (8) If the distribution percentage is greater than eighty 3 percent but not greater than eighty-five percent, the rate 4 shall be twenty-five and five-tenths cents for ethanol blended 5 gasoline and twenty-six and seven-tenths cents for motor fuel 6 other than ethanol blended gasoline. 7 (9) If the distribution percentage is greater than 8 eighty-five percent but not greater than ninety percent, the 9 rate shall be twenty-five and seven-tenths cents for ethanol 10 blended gasoline and twenty-six and four-tenths cents for motor 11 fuel other than ethanol blended gasoline. 12 (10) If the distribution percentage is greater than ninety 13 percent but not greater than ninety-five percent, the rate 14 shall be twenty-five and nine-tenths cents for ethanol blended 15 gasoline and twenty-six and one-tenth cents for motor fuel 16 other than ethanol blended gasoline. 17 (11) If the distribution percentage is greater than 18 ninety-five percent, the rate shall be twenty-six cents for 19 ethanol blended gasoline and twenty-six cents for motor fuel 20 other than ethanol blended gasoline. 21 Sec. 4. Section 452A.3, subsections 2 and 6, Code 2015, are 22 amended to read as follows: 23 2. Except as otherwise provided in this section and in this 24 division , after June 30, 2015 2017 , an excise tax of twenty 25 twenty-six cents is imposed on each gallon of motor fuel used 26 for any purpose for the privilege of operating motor vehicles 27 in this state. 28 6. a. For the privilege of operating motor vehicles or 29 aircraft in this state, there is imposed an excise tax on the 30 use of special fuel in a motor vehicle or aircraft. 31 (1) The For the period beginning July 1, 2015, and ending 32 June 30, 2016, the tax rate on special fuel for diesel engines 33 of motor vehicles is twenty-two twenty-five and one-half cents 34 per gallon. After June 30, 2016, the tax rate on special 35 -4- LSB 1468YH (4) 86 ns/sc 4/ 11

H.F. 144 fuel for diesel engines of motor vehicles is twenty-eight and 1 one-half cents per gallon. 2 (2) The rate of tax on special fuel for aircraft is three 3 cents per gallon. 4 (3) On all other special fuel, unless otherwise specified in 5 this section , the per gallon rate is the same as the motor fuel 6 tax. 7 b. Indelible dye meeting United States environmental 8 protection agency and internal revenue service regulations must 9 be added to fuel before or upon withdrawal at a terminal or 10 refinery rack for that fuel to be exempt from tax and the dyed 11 fuel may be used only for an exempt purpose. 12 DIVISION II 13 WAGERING TAX RECEIPTS 14 Sec. 5. Section 8.57, subsection 5, paragraph f, Code 2015, 15 is amended to read as follows: 16 f. (1) (a) For the fiscal year beginning July 1, 2015, and 17 for each fiscal year thereafter, of the wagering tax receipts 18 received pursuant to sections 99D.17 and 99F.11, the first 19 fifty million dollars shall be deposited in the road use tax 20 fund created in section 312.1. 21 (b) For the fiscal year beginning July 1, 2013 2015 , and for 22 each fiscal year thereafter until the principal and interest on 23 all bonds issued by the treasurer of state pursuant to section 24 12.87 are paid, as determined by the treasurer of state, of 25 the wagering tax receipts received pursuant to sections 99D.17 26 and 99F.11 , the first next fifty-five million dollars shall 27 be deposited in the revenue bonds debt service fund created 28 in section 12.89 , and the next three million seven hundred 29 fifty thousand dollars shall be deposited in the revenue bonds 30 federal subsidy holdback fund created in section 12.89A . 31 (b) (c) For the fiscal year beginning July 1, 2013 2015 , 32 and for each fiscal year through the fiscal year beginning July 33 1, 2019, of the wagering tax receipts received pursuant to 34 sections 99D.17 and 99F.11 , the next fifteen million dollars 35 -5- LSB 1468YH (4) 86 ns/sc 5/ 11

H.F. 144 shall be deposited in the vision Iowa fund created in section 1 12.72 . 2 (c) (d) For the fiscal year beginning July 1, 2013 2015 , 3 and for each fiscal year thereafter, of the wagering tax 4 receipts received pursuant to sections 99D.17 and 99F.11 , the 5 next sixty-six million dollars shall be deposited in the Iowa 6 skilled worker and job creation fund created in section 8.75 . 7 (d) (e) For the fiscal year beginning July 1, 2013 2015 , 8 and for each fiscal year thereafter, the total moneys in excess 9 of the moneys deposited under this paragraph “f” in the road 10 use tax fund, the revenue bonds debt service fund, the revenue 11 bonds federal subsidy holdback fund, the vision Iowa fund, 12 and the Iowa skilled worker and job creation fund shall be 13 deposited in the rebuild Iowa infrastructure fund and shall be 14 used as provided in this section , notwithstanding section 8.60 . 15 (2) For the fiscal year beginning July 1, 2013 2015 , and 16 for each fiscal year thereafter, after the deposit of moneys 17 directed to be deposited in the road use tax fund, as provided 18 in subparagraph (1), subparagraph division (a), if the total 19 amount of the wagering tax receipts received pursuant to 20 sections 99D.17 and 99F.11 , and to be deposited pursuant to 21 subparagraph (1), subparagraph division (a) (b) , is less 22 than the total amount of moneys directed to be deposited in 23 the revenue bonds debt service fund and the revenue bonds 24 federal subsidy holdback fund in the fiscal year pursuant to 25 subparagraph (1), subparagraph division (a) (b) , the difference 26 shall be paid from moneys deposited in the beer and liquor 27 control fund created in section 123.53 in the manner provided 28 in section 123.53, subsection 3 . 29 (3) For the fiscal year beginning July 1, 2013 2015 , and 30 for each fiscal year thereafter, after the deposit of moneys 31 directed to be deposited in the road use tax fund, as provided 32 in subparagraph (1), subparagraph division (a), and after the 33 deposit of moneys directed to be deposited in the revenue 34 bonds debt service fund and the revenue bonds federal subsidy 35 -6- LSB 1468YH (4) 86 ns/sc 6/ 11

H.F. 144 holdback fund, as provided in subparagraph (1), subparagraph 1 division (a) (b) , if the total amount of the wagering tax 2 receipts received pursuant to sections 99D.17 and 99F.11 , and 3 to be deposited pursuant to subparagraph (1), subparagraph 4 division (b) (c) , is less than the total amount of moneys 5 directed to be deposited in the vision Iowa fund in the fiscal 6 year pursuant to subparagraph (1), subparagraph division (b) 7 (c) , the difference shall be paid from lottery revenues in the 8 manner provided in section 99G.39, subsection 3 . 9 Sec. 6. Section 312.1, subsection 1, Code 2015, is amended 10 by adding the following new paragraph: 11 NEW PARAGRAPH . 0e. Revenue derived from the wagering tax 12 receipts received pursuant to sections 99D.17 and 99F.11, to 13 the extent provided under section 8.57, subsection 5, paragraph 14 “f” . 15 DIVISION III 16 AUTOMATED ENFORCEMENT REVENUE 17 Sec. 7. NEW SECTION . 384.3B Automated traffic enforcement 18 program account. 19 1. A city that uses one or more automated traffic 20 enforcement systems to issue civil citations for violations of 21 traffic ordinances classified as municipal infractions shall 22 deposit revenues received from such citations in an automated 23 traffic enforcement program account established within the 24 city’s general fund. 25 2. a. Moneys in the account shall be used to pay the costs 26 of operating the city’s automated traffic enforcement program. 27 b. Fifty percent of the moneys in the account in excess of 28 the amount necessary for the purpose specified in paragraph 29 “a” shall be remitted to the treasurer of state monthly and 30 deposited in the road use tax fund created in section 312.1. 31 Notwithstanding section 8.33, moneys transferred under this 32 subsection shall not revert to the general fund of the state. 33 c. Moneys in the account in excess of the amount necessary 34 for the purposes specified in paragraphs “a” and “b” may be 35 -7- LSB 1468YH (4) 86 ns/sc 7/ 11

H.F. 144 used as otherwise authorized by law for revenues collected from 1 municipal infraction citations. 2 3. For the purposes of this section, “automated traffic 3 enforcement system” means a device with one or more sensors 4 working in conjunction with one of the following: 5 a. An official traffic-control signal, as defined in section 6 321.1, to produce recorded images of motor vehicles entering an 7 intersection against a steady circular red light. 8 b. A speed measuring device to produce recorded images of 9 motor vehicles traveling at a prohibited rate of speed. 10 c. A device to produce recorded images of motor vehicles 11 violating a railroad grade crossing signal light, as described 12 in section 321.342. 13 d. Any official traffic-control device, as defined 14 in section 321.1, if failure to comply with the official 15 traffic-control device constitutes a moving violation under 16 chapter 321. 17 DIVISION IV 18 HIGHWAY MAINTENANCE PRIORITY 19 Sec. 8. Section 307.24, Code 2015, is amended to read as 20 follows: 21 307.24 Administration of highways. 22 The department’s administrator of highways is responsible 23 for the planning, design, construction, and maintenance of 24 the state primary highways and shall administer chapters 306 25 to 320 and perform other duties as assigned by the director. 26 The administration of highways shall be organized to provide 27 administration for urban systems, for secondary roads, 28 and other categories of administration as necessary. The 29 administrator of highways shall prioritize the completion 30 of ongoing, unfinished projects related to construction and 31 maintenance of the state primary highways and four-lane divided 32 roadways over the commencement of new projects related to 33 construction and maintenance of the state primary highways and 34 four-lane divided roadways, notwithstanding any provision of 35 -8- LSB 1468YH (4) 86 ns/sc 8/ 11

H.F. 144 law to the contrary. 1 DIVISION V 2 EFFICIENCY MEASURES 3 Sec. 9. DEPARTMENT OF TRANSPORTATION EFFICIENCY MEASURES 4 —— REPORT. The department of transportation shall implement 5 efficiency measures in an effort to save $50 million that would 6 otherwise be appropriated from the road use tax fund or primary 7 road fund for department operations. The department shall 8 submit a report in an electronic format to the co-chairpersons 9 of the joint appropriations subcommittee on transportation, 10 infrastructure, and capitals, the chairpersons of the senate 11 and house standing committees on transportation, the department 12 of management, and the legislative services agency regarding 13 the implementation of such efficiency measures. The report 14 shall provide details of the one-time and long-term initiatives 15 undertaken by the department, and indicate the results of such 16 initiatives. The report shall be submitted by January 1, 2016. 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 increasing revenue to, and prioritizing 21 spending of, the road use tax fund. 22 DIVISION I —— MOTOR FUEL EXCISE TAX. The bill increases 23 the rate of the excise tax on ethanol blended gasoline, motor 24 fuel other than ethanol blended gasoline, and special fuel for 25 diesel engines of motor vehicles by 3 cents beginning July 1, 26 2015, and by an additional 3 cents beginning July 1, 2016. The 27 bill provides that the distribution percentage formula for 28 determining the difference in the excise tax imposed on ethanol 29 blended gasoline and motor fuel other than ethanol blended 30 gasoline, which is due to expire on June 30, 2015, will expire 31 on June 30, 2017. After the distribution percentage formula 32 expires, the bill provides that the excise tax on each gallon 33 of motor fuel shall be 26 cents. 34 DIVISION II —— WAGERING TAX RECEIPTS. The bill provides 35 -9- LSB 1468YH (4) 86 ns/sc 9/ 11

H.F. 144 that, beginning July 1, 2015, of the wagering tax receipts 1 received pursuant to Code sections 99D.17 and 99F.11 and 2 deposited pursuant to Code section 8.57, subsection 5, the 3 first $50 million shall be deposited in the road use tax fund. 4 This provision takes priority over the deposit of moneys 5 into the revenue bonds debt service fund, the revenue bonds 6 federal subsidy holdback fund, the vision Iowa fund, the Iowa 7 skilled worker and job creation fund, and the rebuild Iowa 8 infrastructure fund. 9 DIVISION III —— AUTOMATED ENFORCEMENT REVENUE. The bill 10 requires that 50 percent of the revenue generated from the 11 use of automated traffic enforcement systems be deposited in 12 the road use tax fund. The bill defines “automated traffic 13 enforcement system” as a device with one or more sensors 14 working in conjunction with an official traffic-control signal, 15 a speed measuring device, a device that records images of motor 16 vehicles violating a railroad grade crossing signal light, or 17 any official traffic-control device if failure to comply with 18 the traffic-control device would constitute a moving violation 19 if cited under state law. 20 The bill provides that a city with an automated traffic 21 enforcement system must establish a separate account in the 22 city’s general fund for the deposit of revenues collected 23 from citations issued through the use of automated traffic 24 enforcement systems. Moneys in the account shall be used first 25 to pay the costs of the city’s automated traffic enforcement 26 system. Fifty percent of the remaining moneys shall be 27 deposited in the road use tax fund. The remaining moneys in 28 the account may be transferred as authorized by law for revenue 29 collected from municipal infraction citations. 30 DIVISION IV —— HIGHWAY MAINTENANCE PRIORITY. The bill 31 requires the department of transportation’s (DOT) administrator 32 of highways to prioritize the completion of in-progress highway 33 construction and maintenance projects over the commencement of 34 new projects. 35 -10- LSB 1468YH (4) 86 ns/sc 10/ 11

H.F. 144 DIVISION V —— EFFICIENCY MEASURES. The bill requires the DOT 1 to implement efficiency measures in order to save $50 million 2 in expenditures on department operations. The department shall 3 submit a report in an electronic format to the co-chairpersons 4 of the joint appropriations subcommittee on transportation, 5 infrastructure, and capitals, the chairpersons of the senate 6 and house standing committees on transportation, the department 7 of management, and the legislative services agency regarding 8 the implementation of such efficiency measures. The report 9 shall provide details of the one-time and long-term initiatives 10 undertaken by the department, and indicate the results of such 11 initiatives. The report shall be submitted by January 1, 2016. 12 -11- LSB 1468YH (4) 86 ns/sc 11/ 11