SF 507 (LSB 1309SV (2) 86)

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 certain all-terrain vehicles and off-road utility vehicles from the sales and use tax, modifying the flood mitigation program, and modifying the disabled veteran homestead tax credit, and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
SALES AND USE TAXES
    Section 1.  Section 423.3, subsection 8, paragraph d, Code 2015, is amended to read as follows:
   d.  (1)  For purposes of this subsection, the following items are exempt under paragraph “a” when used primarily in agricultural production: 
   (a)  A diesel fuel trailer, regardless of the vehicle to which it is to be attached.
   (b)  A seed tender, regardless of the vehicle to which it is to be attached.
   (c)  An all-terrain vehicle.
   (d)  An off-road utility vehicle.
   (2)  For purposes of this paragraph: 
   (a)  “All-terrain vehicle” means the same as defined in section 321I.1.
   (a)  (b)  “Fuel trailer” means a trailer that holds dyed diesel fuel or diesel exhaust fluid and that is used to transport such fuel or fluid to a self-propelled implement of husbandry.
   (c)  “Off-road utility vehicle” means the same as defined in section 321I.1.
   (b)  (d)  “Seed tender” means a trailer that holds seed and that is used to transport seed to an implement of husbandry and load seed into an implement of husbandry.

DIVISION II
FLOOD MITIGATION PROGRAM
    Sec. 2.  Section 418.5, subsections 1 and 6, Code 2015, are amended to read as follows:
   1.  The flood mitigation board is established consisting of nine voting members and four five ex officio, nonvoting members, and is located for administrative purposes within the department. The director of the department shall provide office space, staff assistance, and necessary supplies and equipment for the board. The director shall budget funds to pay the necessary expenses of the board. In performing its functions, the board is performing a public function on behalf of the state and is a public instrumentality of the state.
   6.  The board’s ex officio membership shall include be comprised of the following: 
   a.  four Four members of the general assembly with one each appointed by the majority leader of the senate, the minority leader of the senate, the speaker of the house of representatives, and the minority leader of the house of representatives. A legislative member serves for a term as provided in section 69.16B in an ex officio, nonvoting capacity and is eligible for per diem and expenses as provided in section 2.10.
   b.  The director of revenue or the director’s designee.
    Sec. 3.  Section 418.15, subsection 1, Code 2015, is amended to read as follows:
   1.  A governmental entity shall not receive remittances of sales tax revenue under this chapter after twenty years from the date the governmental entity’s project was approved by the board unless the remittance amount is calculated under section 418.11 based on sales subject to the tax under section 423.2 occurring before the expiration of the twenty-year period.

DIVISION III
DISABLED VETERAN HOMESTEAD

PROPERTY TAX CREDIT APPLICATION
    Sec. 4.  2015 Iowa Acts, House File 166, is amended by adding the following new section:
   NEW SECTION.  SEC. 6.  EXCEPTION TO APPLICATION FILING DEADLINE.  Notwithstanding the filing deadline under section 425.2, claims for the homestead credit authorized under section 425.15, as amended in this Act, filed after July 1, 2014, but before July 1, 2015, shall be considered to be a claim properly filed for taxes due and payable in the fiscal year beginning July 1, 2015.
    Sec. 5.  EFFECTIVE UPON ENACTMENT.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 6.  RETROACTIVE APPLICABILITY.  This division of this Act applies retroactively to March 5, 2015.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to the policy administration of the tax and related laws by the department of revenue.
   DIVISION I —— SALES AND USE TAXES. Division I exempts the sales price of all-terrain vehicles and off-road utility vehicles used primarily in agricultural production from the sales and use tax. Under current law, such vehicles are not exempt from sales and use tax unless they are directly and primarily used in production of agricultural products.
   “All-terrain vehicle” means a motorized vehicle with not less than three and not more than six nonhighway tires that is limited in engine displacement to less than 1,000 cubic centimeters and in total dry weight to less than 1,200 pounds and that has a seat or saddle designed to be straddled by the operator and handlebars for steering control.
   “Off-road utility vehicle” means a motorized vehicle with not less than four and not more than eight nonhighway tires or rubberized tracks that has a seat that is of bucket or bench design, not intended to be straddled by the operator, and a steering wheel or control levers for control.
   By operation of Code section 423.6, an item exempt from the imposition of the sales tax is also exempt from the use tax imposed in Code section 423.5.
   DIVISION II —— FLOOD MITIGATION PROGRAM. Division II adds the director of revenue, or a designee of the director, as an ex officio, nonvoting member of the flood mitigation board created in Code chapter 418. The flood mitigation board is currently composed of nine voting members and four ex officio, nonvoting members who are members of the general assembly, and is responsible for overseeing the flood mitigation program administered by the department of homeland security and emergency management.
   Division II also modifies provisions relating to the remittance of sales tax revenues to governmental entities under the flood mitigation program. Under current law, no sales tax revenues shall be remitted to government entities after 20 years from the project’s approval date. The bill provides that sales tax revenue may be remitted to governmental entities after that 20-year period provided the remitted sales tax amounts are based on sales occurring before the expiration of the project’s 20-year period.
   DIVISION III —— DISABLED VETERAN HOMESTEAD PROPERTY TAX CREDIT APPLICATION. Code section 425.2 establishes the filing deadline for the homestead credit available to certain disabled veterans under Code section 425.15. The bill provides that, notwithstanding the filing deadline under section 425.2, a claim for the homestead credit authorized under Code section 425.15, as amended by 2015 Acts, House File 166, filed after July 1, 2014, but before July 1, 2015, shall be considered to be a claim properly filed for taxes due and payable in the fiscal year beginning July 1, 2015.
   Division III of the bill takes effect upon enactment and applies retroactively to March 5, 2015.