Senate File 507 - Introduced SENATE FILE 507 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 1224) A BILL FOR An Act relating to state revenue and finance laws by exempting 1 certain all-terrain vehicles and off-road utility vehicles 2 from the sales and use tax, modifying the flood mitigation 3 program, and modifying the disabled veteran homestead 4 tax credit, and including effective date and retroactive 5 applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 1309SV (2) 86 mm/sc

S.F. 507 DIVISION I 1 SALES AND USE TAXES 2 Section 1. Section 423.3, subsection 8, paragraph d, Code 3 2015, is amended to read as follows: 4 d. (1) For purposes of this subsection , the following 5 items are exempt under paragraph “a” when used primarily in 6 agricultural production: 7 (a) A diesel fuel trailer, regardless of the vehicle to 8 which it is to be attached. 9 (b) A seed tender, regardless of the vehicle to which it is 10 to be attached. 11 (c) An all-terrain vehicle. 12 (d) An off-road utility vehicle. 13 (2) For purposes of this paragraph: 14 (a) “All-terrain vehicle” means the same as defined in 15 section 321I.1. 16 (a) (b) “Fuel trailer” means a trailer that holds dyed 17 diesel fuel or diesel exhaust fluid and that is used to 18 transport such fuel or fluid to a self-propelled implement of 19 husbandry. 20 (c) “Off-road utility vehicle” means the same as defined in 21 section 321I.1. 22 (b) (d) “Seed tender” means a trailer that holds seed and 23 that is used to transport seed to an implement of husbandry and 24 load seed into an implement of husbandry. 25 DIVISION II 26 FLOOD MITIGATION PROGRAM 27 Sec. 2. Section 418.5, subsections 1 and 6, Code 2015, are 28 amended to read as follows: 29 1. The flood mitigation board is established consisting 30 of nine voting members and four five ex officio, nonvoting 31 members, and is located for administrative purposes within 32 the department. The director of the department shall provide 33 office space, staff assistance, and necessary supplies and 34 equipment for the board. The director shall budget funds to 35 -1- LSB 1309SV (2) 86 mm/sc 1/ 4

S.F. 507 pay the necessary expenses of the board. In performing its 1 functions, the board is performing a public function on behalf 2 of the state and is a public instrumentality of the state. 3 6. The board’s ex officio membership shall include be 4 comprised of the following: 5 a. four Four members of the general assembly with one 6 each appointed by the majority leader of the senate, the 7 minority leader of the senate, the speaker of the house of 8 representatives, and the minority leader of the house of 9 representatives. A legislative member serves for a term as 10 provided in section 69.16B in an ex officio, nonvoting capacity 11 and is eligible for per diem and expenses as provided in 12 section 2.10 . 13 b. The director of revenue or the director’s designee. 14 Sec. 3. Section 418.15, subsection 1, Code 2015, is amended 15 to read as follows: 16 1. A governmental entity shall not receive remittances of 17 sales tax revenue under this chapter after twenty years from 18 the date the governmental entity’s project was approved by the 19 board unless the remittance amount is calculated under section 20 418.11 based on sales subject to the tax under section 423.2 21 occurring before the expiration of the twenty-year period . 22 DIVISION III 23 DISABLED VETERAN HOMESTEAD 24 PROPERTY TAX CREDIT APPLICATION 25 Sec. 4. 2015 Iowa Acts, House File 166, is amended by adding 26 the following new section: 27 NEW SECTION . SEC. 6. EXCEPTION TO APPLICATION FILING 28 DEADLINE. Notwithstanding the filing deadline under section 29 425.2, claims for the homestead credit authorized under section 30 425.15, as amended in this Act, filed after July 1, 2014, but 31 before July 1, 2015, shall be considered to be a claim properly 32 filed for taxes due and payable in the fiscal year beginning 33 July 1, 2015. 34 Sec. 5. EFFECTIVE UPON ENACTMENT. This division of this 35 -2- LSB 1309SV (2) 86 mm/sc 2/ 4

S.F. 507 Act, being deemed of immediate importance, takes effect upon 1 enactment. 2 Sec. 6. RETROACTIVE APPLICABILITY. This division of this 3 Act applies retroactively to March 5, 2015. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 This bill relates to the policy administration of the tax and 8 related laws by the department of revenue. 9 DIVISION I —— SALES AND USE TAXES. Division I exempts 10 the sales price of all-terrain vehicles and off-road utility 11 vehicles used primarily in agricultural production from the 12 sales and use tax. Under current law, such vehicles are not 13 exempt from sales and use tax unless they are directly and 14 primarily used in production of agricultural products. 15 “All-terrain vehicle” means a motorized vehicle with not 16 less than three and not more than six nonhighway tires that 17 is limited in engine displacement to less than 1,000 cubic 18 centimeters and in total dry weight to less than 1,200 pounds 19 and that has a seat or saddle designed to be straddled by the 20 operator and handlebars for steering control. 21 “Off-road utility vehicle” means a motorized vehicle with 22 not less than four and not more than eight nonhighway tires or 23 rubberized tracks that has a seat that is of bucket or bench 24 design, not intended to be straddled by the operator, and a 25 steering wheel or control levers for control. 26 By operation of Code section 423.6, an item exempt from the 27 imposition of the sales tax is also exempt from the use tax 28 imposed in Code section 423.5. 29 DIVISION II —— FLOOD MITIGATION PROGRAM. Division II adds 30 the director of revenue, or a designee of the director, as an 31 ex officio, nonvoting member of the flood mitigation board 32 created in Code chapter 418. The flood mitigation board is 33 currently composed of nine voting members and four ex officio, 34 nonvoting members who are members of the general assembly, and 35 -3- LSB 1309SV (2) 86 mm/sc 3/ 4

S.F. 507 is responsible for overseeing the flood mitigation program 1 administered by the department of homeland security and 2 emergency management. 3 Division II also modifies provisions relating to the 4 remittance of sales tax revenues to governmental entities under 5 the flood mitigation program. Under current law, no sales 6 tax revenues shall be remitted to government entities after 7 20 years from the project’s approval date. The bill provides 8 that sales tax revenue may be remitted to governmental entities 9 after that 20-year period provided the remitted sales tax 10 amounts are based on sales occurring before the expiration of 11 the project’s 20-year period. 12 DIVISION III —— DISABLED VETERAN HOMESTEAD PROPERTY TAX 13 CREDIT APPLICATION. Code section 425.2 establishes the filing 14 deadline for the homestead credit available to certain disabled 15 veterans under Code section 425.15. The bill provides that, 16 notwithstanding the filing deadline under section 425.2, a 17 claim for the homestead credit authorized under Code section 18 425.15, as amended by 2015 Acts, House File 166, filed after 19 July 1, 2014, but before July 1, 2015, shall be considered to 20 be a claim properly filed for taxes due and payable in the 21 fiscal year beginning July 1, 2015. 22 Division III of the bill takes effect upon enactment and 23 applies retroactively to March 5, 2015. 24 -4- LSB 1309SV (2) 86 mm/sc 4/ 4