Senate Study Bill 1198 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON APPROPRIATIONS BILL BY CHAIRPERSON SCHNEIDER) A BILL FOR An Act relating to state and local finances by making 1 appropriations, providing for legal and regulatory 2 responsibilities, concerning taxation, and providing for 3 other properly related matters, and including effective date 4 and retroactive applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2689XC (9) 87 tm/rn

S.F. _____ DIVISION I 1 STANDING APPROPRIATIONS AND RELATED MATTERS 2 Section 1. BUDGET PROCESS FOR FISCAL YEAR 2018-2019. 3 1. For the budget process applicable to the fiscal year 4 beginning July 1, 2018, on or before October 1, 2017, in lieu 5 of the information specified in section 8.23, subsection 6 1, unnumbered paragraph 1, and section 8.23, subsection 1, 7 paragraph “a”, all departments and establishments of the 8 government shall transmit to the director of the department 9 of management, on blanks to be furnished by the director, 10 estimates of their expenditure requirements, including every 11 proposed expenditure, for the ensuing fiscal year, together 12 with supporting data and explanations as called for by the 13 director of the department of management after consultation 14 with the legislative services agency. 15 2. The estimates of expenditure requirements shall be 16 in a form specified by the director of the department of 17 management, and the expenditure requirements shall include all 18 proposed expenditures and shall be prioritized by program or 19 the results to be achieved. The estimates shall be accompanied 20 by performance measures for evaluating the effectiveness of the 21 programs or results. 22 Sec. 2. BUDGET PROCESS FOR FISCAL YEAR 2019-2020. 23 1. For the budget process applicable to the fiscal year 24 beginning July 1, 2019, on or before October 1, 2018, in lieu 25 of the information specified in section 8.23, subsection 26 1, unnumbered paragraph 1, and section 8.23, subsection 1, 27 paragraph “a”, all departments and establishments of the 28 government shall transmit to the director of the department 29 of management, on blanks to be furnished by the director, 30 estimates of their expenditure requirements, including every 31 proposed expenditure, for the ensuing fiscal year, together 32 with supporting data and explanations as called for by the 33 director of the department of management after consultation 34 with the legislative services agency. 35 -1- LSB 2689XC (9) 87 tm/rn 1/ 27

S.F. _____ 2. The estimates of expenditure requirements shall be 1 in a form specified by the director of the department of 2 management, and the expenditure requirements shall include all 3 proposed expenditures and shall be prioritized by program or 4 the results to be achieved. The estimates shall be accompanied 5 by performance measures for evaluating the effectiveness of the 6 programs or results. 7 Sec. 3. LIMITATIONS OF STANDING APPROPRIATIONS —— FY 8 2017-2018. Notwithstanding the standing appropriations 9 in the following designated sections for the fiscal year 10 beginning July 1, 2017, and ending June 30, 2018, the amounts 11 appropriated from the general fund of the state pursuant to 12 these sections for the following designated purposes shall not 13 exceed the following amounts: 14 1. For payment of claims for nonpublic school 15 transportation under section 285.2: 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,197,091 17 If total approved claims for reimbursement for nonpublic 18 school pupil transportation exceed the amount appropriated in 19 accordance with this subsection, the department of education 20 shall prorate the amount of each approved claim. 21 2. For distribution for the tribal council of the Sac and 22 Fox Indian settlement for educating American Indian children 23 under section 256.30: 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 95,750 25 Sec. 4. LIMITATIONS OF STANDING APPROPRIATIONS —— FY 26 2018-2019. Notwithstanding the standing appropriations 27 in the following designated sections for the fiscal year 28 beginning July 1, 2018, and ending June 30, 2019, the amounts 29 appropriated from the general fund of the state pursuant to 30 these sections for the following designated purposes shall not 31 exceed the following amounts: 32 1. For payment of claims for nonpublic school 33 transportation under section 285.2: 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,197,091 35 -2- LSB 2689XC (9) 87 tm/rn 2/ 27

S.F. _____ If total approved claims for reimbursement for nonpublic 1 school pupil transportation exceed the amount appropriated in 2 accordance with this subsection, the department of education 3 shall prorate the amount of each approved claim. 4 2. For distribution for the tribal council of the Sac and 5 Fox Indian settlement for educating American Indian children 6 under section 256.30: 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 95,750 8 Sec. 5. GENERAL ASSEMBLY. 9 1. The appropriations made pursuant to section 2.12 for the 10 expenses of the general assembly and legislative agencies for 11 the fiscal year beginning July 1, 2017, and ending June 30, 12 2018, are reduced by the following amount: 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 400,000 14 2. The budgeted amounts for the general assembly and 15 legislative agencies for the fiscal year beginning July 1, 16 2017, may be adjusted to reflect the unexpended budgeted 17 amounts from the previous fiscal year. 18 3. Annual membership dues for organizations, associations, 19 and conferences shall not be paid from moneys appropriated 20 pursuant to section 2.12. 21 4. Costs for out-of-state travel and per diems for 22 out-of-state travel shall not be paid from moneys appropriated 23 pursuant to section 2.12. 24 Sec. 6. INSTRUCTIONAL SUPPORT STATE AID —— FY 2017-2018. In 25 lieu of the appropriation provided in section 257.20, 26 subsection 2, the appropriation for the fiscal year 27 beginning July 1, 2017, and ending June 30, 2018, for paying 28 instructional support state aid under section 257.20 for such 29 fiscal years is zero. 30 Sec. 7. SPECIAL FUNDS —— SALARY ADJUSTMENTS —— FY 2017-2018 31 —— FY 2018-2019. For the fiscal year beginning July 1, 2017, 32 and ending June 30, 2018, and for the fiscal year beginning 33 July 1, 2018, and ending June 30, 2019, salary adjustments may 34 be funded using departmental revolving, trust, or special funds 35 -3- LSB 2689XC (9) 87 tm/rn 3/ 27

S.F. _____ for which the general assembly has established an operating 1 budget, provided that doing so does not exceed the operating 2 budget established by the general assembly. 3 Sec. 8. OPERATIONAL APPROPRIATIONS —— REVERSION —— FY 4 2016-2017. Notwithstanding section 8.62, at the close of 5 the fiscal year beginning July 1, 2016, and ending June 30, 6 2017, any balance of an operational appropriation that remains 7 unexpended or unencumbered shall not be encumbered or deposited 8 in the cash reserve fund as provided in section 8.62, but shall 9 instead revert to the general fund of the state at the close of 10 the fiscal year as provided in section 8.33. 11 Sec. 9. SPECIAL FUNDS —— SALARY ADJUSTMENTS —— 12 UNAPPROPRIATED MONEYS —— FY 2017-2018 —— FY 2018-2019. For the 13 fiscal year beginning July 1, 2017, and ending June 30, 2018, 14 and for the fiscal year beginning July 1, 2018, and ending 15 June 30, 2019, salary adjustments otherwise provided may be 16 funded as determined by the department of management using 17 unappropriated moneys remaining in the department of commerce 18 revolving fund, the gaming enforcement revolving fund, the 19 gaming regulatory revolving fund, the primary road fund, the 20 road use tax fund, the fish and game protection fund, the Iowa 21 public employees’ retirement fund, and in other departmental 22 revolving, trust, or special funds for which the general 23 assembly has not made an operating budget appropriation. 24 Sec. 10. SALARY MODEL ADMINISTRATOR. The salary model 25 administrator shall work in conjunction with the legislative 26 services agency to maintain the state’s salary model used for 27 analyzing, comparing, and projecting state employee salary 28 and benefit information, including information relating to 29 employees of the state board of regents. The department of 30 revenue, the department of administrative services, the five 31 institutions under the jurisdiction of the state board of 32 regents, the judicial district departments of correctional 33 services, and the state department of transportation shall 34 provide salary data to the department of management and the 35 -4- LSB 2689XC (9) 87 tm/rn 4/ 27

S.F. _____ legislative services agency to operate the state’s salary 1 model. The format and frequency of provision of the salary 2 data shall be determined by the department of management and 3 the legislative services agency. The information shall be 4 used in collective bargaining processes under chapter 20 and 5 in calculating the funding needs contained within the annual 6 salary adjustment legislation. A state employee organization 7 as defined in section 20.3, subsection 4, may request 8 information produced by the model, but the information provided 9 shall not contain information attributable to individual 10 employees. 11 Sec. 11. Section 257.35, Code 2017, is amended by adding the 12 following new subsection: 13 NEW SUBSECTION . 11A. Notwithstanding subsection 1, and in 14 addition to the reduction applicable pursuant to subsection 15 2, the state aid for area education agencies and the portion 16 of the combined district cost calculated for these agencies 17 for the fiscal year beginning July 1, 2017, and ending June 18 30, 2018, shall be reduced by the department of management by 19 fifteen million dollars. The reduction for each area education 20 agency shall be prorated based on the reduction that the agency 21 received in the fiscal year beginning July 1, 2003. 22 Sec. 12. EFFECTIVE UPON ENACTMENT. The following provision 23 or provisions of this division of this Act, being deemed of 24 immediate importance, take effect upon enactment: 25 1. The section of this division of this Act reverting to 26 the general fund any unexpended or unencumbered moneys from 27 operational appropriations. 28 DIVISION II 29 MISCELLANEOUS APPROPRIATIONS 30 Sec. 13. TRANSFER FROM CASH RESERVE FUND. Notwithstanding 31 section 8.56, subsections 3 and 4, there is transferred from 32 the cash reserve fund created in section 8.56 to the general 33 fund of the state for the fiscal year beginning July 1, 2016, 34 and ending June 30, 2017, the following amount: 35 -5- LSB 2689XC (9) 87 tm/rn 5/ 27

S.F. _____ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $131,100,000 1 Sec. 14. APPROPRIATION TO CASH RESERVE FUND. There is 2 appropriated from the general fund of the state to the cash 3 reserve fund created in section 8.56 for the fiscal year 4 beginning July 1, 2017, and ending June 30, 2018, the following 5 amount: 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000,000 7 Sec. 15. GUBERNATORIAL TRANSITION. There is appropriated 8 from the general fund of the state to the offices of the 9 governor and the lieutenant governor for the fiscal year 10 beginning July 1, 2017, and ending June 30, 2018, the following 11 amount, or so much thereof as is necessary, to be used for the 12 purposes designated: 13 For expenses incurred during the gubernatorial transition: 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 150,000 15 Sec. 16. EFFECTIVE UPON ENACTMENT. The following provision 16 or provisions of this division of this Act, being deemed of 17 immediate importance, take effect upon enactment: 18 1. The section of this division of this Act transferring 19 moneys from the cash reserve fund to the general fund of the 20 state. 21 DIVISION III 22 MISCELLANEOUS PROVISIONS 23 Sec. 17. Section 2.43, unnumbered paragraph 1, Code 2017, 24 is amended to read as follows: 25 The legislative council in cooperation with the officers of 26 the senate and house shall have the duty and responsibility for 27 preparing for each session of the general assembly. Pursuant 28 to such duty and responsibility, the legislative council 29 shall assign the use of areas in the state capitol except for 30 the areas used by the governor as of January 1, 1986, and by 31 the courts as of July 1, 2003, and, in consultation with the 32 director of the department of administrative services and the 33 capitol planning commission, may assign areas in other state 34 office buildings for use of the general assembly or legislative 35 -6- LSB 2689XC (9) 87 tm/rn 6/ 27

S.F. _____ agencies. The legislative council shall provide the courts 1 with use of space in the state capitol for ceremonial purposes. 2 The legislative council may authorize the renovation, 3 remodeling and preparation of the physical facilities used or 4 to be used by the general assembly or legislative agencies 5 subject to the jurisdiction of the legislative council and 6 award contracts pursuant to such authority to carry out such 7 preparation. The legislative council may purchase supplies and 8 equipment deemed necessary for the proper functioning of the 9 legislative branch of government. 10 Sec. 18. Section 8A.322, subsection 2, Code 2017, is amended 11 to read as follows: 12 2. Except for buildings and grounds described in section 13 216B.3, subsection 6 ; section 2.43 , unnumbered paragraph 1; and 14 any buildings under the custody and control of the Iowa public 15 employees’ retirement system, the director shall assign office 16 space at the capitol, other state buildings, and elsewhere in 17 the city of Des Moines, and the state laboratories facility 18 in Ankeny, for all executive and judicial state agencies. 19 Assignments may be changed at any time. The various officers 20 to whom rooms have been so assigned may control the same while 21 the assignment to them is in force. Official apartments shall 22 be used only for the purpose of conducting the business of the 23 state. The term “capitol” or “capitol building” as used in the 24 Code shall be descriptive of all buildings upon the capitol 25 grounds. The capitol building itself is reserved for the 26 operations of the general assembly , and the governor, and , for 27 ceremonial purposes, for the courts and the . The assignment 28 and use of physical facilities for the general assembly shall 29 be pursuant to section 2.43 . 30 Sec. 19. Section 8C.7A, subsection 3, paragraph b, 31 unnumbered paragraph 1, if enacted by 2017 Iowa Acts, Senate 32 File 431, is amended to read as follows: 33 An authority shall not require a person to apply for or 34 enter into an individual license, franchise, or other agreement 35 -7- LSB 2689XC (9) 87 tm/rn 7/ 27

S.F. _____ with the authority or any other entity for the siting of 1 a small wireless facility on a utility pole located in a 2 public right-of-way. However, an authority may, through the 3 conditions set forth in a building permit obtained pursuant to 4 this subsection, do any of the following: 5 Sec. 20. NEW SECTION . 9.4A Technology modernization fund. 6 1. A technology modernization fund is created in the state 7 treasury under the control of the secretary of state. Moneys 8 in the fund are appropriated to the secretary of state for 9 purposes of modernizing technology used by the secretary of 10 state to fulfill the duties of office. 11 2. On and after July 1, 2017, any increased fee amount 12 collected by the secretary of state shall be credited to the 13 technology modernization fund. From each fee collected, the 14 amount credited to the fund equals the difference between the 15 fee amount collected and the amount assessed for the same fee 16 on June 30, 2017. 17 3. Each fiscal year, not more than two million dollars shall 18 be credited to the fund. 19 4. This section is repealed July 1, 2022. 20 Sec. 21. Section 15.329, subsection 1, paragraph f, Code 21 2017, is amended to read as follows: 22 f. The business shall not be a retail business or a business 23 where entrance is limited by a cover charge or membership 24 requirement. For purposes of this paragraph, a business 25 operated for the purpose of fulfilling customer orders is not a 26 retail business or a retail operation. 27 Sec. 22. Section 321N.4, subsection 6, Code 2017, is amended 28 to read as follows: 29 6. Insurance maintained under this chapter shall be 30 provided by an insurer governed by chapter 515 or 518 , or by 31 a surplus lines insurer governed by chapter 515I . A surplus 32 lines insurer that issues a policy pursuant to this section 33 shall be considered an insurance carrier duly authorized to 34 transact business in this state for the purposes of chapter 35 -8- LSB 2689XC (9) 87 tm/rn 8/ 27

S.F. _____ 321A . 1 Sec. 23. Section 403.19A, subsection 3, paragraph c, 2 subparagraph (2), Code 2017, is amended to read as follows: 3 (2) The pilot project city and the economic development 4 authority shall not enter into a withholding agreement after 5 June 30, 2018 2023 . 6 Sec. 24. Section 481A.38, Code 2017, is amended by adding 7 the following new subsection: 8 NEW SUBSECTION . 4. The commission shall not restrict or 9 prohibit hunting on specific private property generally or for 10 the hunting of a particular wild animal, so long as the person 11 hunting on that property is otherwise qualified to hunt in 12 this state, purchases a valid hunting license that includes 13 the wildlife habitat fee and a valid hunting license for the 14 type of wild animal being hunted, if applicable, and adheres to 15 all municipal, county, state, and federal regulations that are 16 applicable to hunting and specifically applicable to the type 17 of wild animal being hunted, including but not limited to daily 18 limits, possession limits, shooting hours, methods of take, and 19 transportation of a carcass. 20 Sec. 25. ALCOHOLIC BEVERAGE CONTROL —— STUDY. 21 1. The alcoholic beverages division of the department of 22 commerce, in conjunction with other stakeholders the division 23 deems necessary, shall conduct a study concerning enforcement 24 issues related to alcoholic beverage control, including 25 consideration of the manner of properly balancing appropriate 26 regulation of the manufacturing, distribution, and sale of 27 alcoholic liquor, wine, and beer in this state with emerging 28 trends in the industry. 29 2. In conducting the study, the division shall consider 30 any other relevant issues the division identifies for study, 31 issues relating to the three-tiered system and section 123.45, 32 as it impacts the ability of manufacturers, wholesalers, and 33 retailers to meet changing marketplace conditions and business 34 opportunities. 35 -9- LSB 2689XC (9) 87 tm/rn 9/ 27

S.F. _____ 3. By July 1, 2018, the division shall submit a final report 1 to the general assembly. The report shall provide the results 2 of the study including any findings and recommendations. 3 4. The administrator may exercise discretion on a 4 case-by-case basis and elect to not enforce section 123.45 5 during the period of such study upon a finding that an 6 applicant does not pose a risk to public health or safety. 7 Sec. 26. SEXUAL ABUSE EVIDENCE COLLECTION KITS. Any sexual 8 abuse evidence collection kit identified by a jurisdictional 9 law enforcement agency through the inventory required pursuant 10 to 2016 Iowa Acts, chapter 1042, shall be maintained by the law 11 enforcement agency indefinitely. A law enforcement agency in 12 possession of any sexual abuse evidence kit identified through 13 the inventory shall submit for analysis any kit at the request 14 of the department of justice. 15 Sec. 27. REPEAL. Chapter 304A, Code 2017, is repealed. 16 DIVISION IV 17 CORRECTIVE PROVISIONS 18 Sec. 28. Section 22.13A, subsection 5, paragraph b, as 19 enacted by 2017 Iowa Acts, House File 291, section 51, is 20 amended to read as follows: 21 b. If paragraph “a” , subparagraph (1) or (2) is not 22 consistent with the provision of a collective bargaining 23 agreement, a state agency shall provide the individuals 24 referenced in this subsection , as applicable, with regular 25 reports regarding any personnel settlement agreements entered 26 into with state employees by the state agency. 27 Sec. 29. Section 73A.26, as enacted by 2017 Iowa Acts, 28 Senate File 438, section 6, is amended to read as follows: 29 73A.26 Purpose. 30 The purpose of this chapter subchapter is to provide for 31 more economical, nondiscriminatory, neutral, and efficient 32 procurement of construction-related goods and services by this 33 state and political subdivisions of this state. 34 Sec. 30. Section 84A.1A, subsection 1, paragraph a, 35 -10- LSB 2689XC (9) 87 tm/rn 10/ 27

S.F. _____ subparagraph (8), subparagraph division (b), subparagraph 1 subdivision (iii), as enacted by 2017 Iowa Acts, House File 2 572, section 1, is amended to read as follows: 3 (iii) Two representatives of community-based organizations 4 that have demonstrated experience and expertise in addressing 5 the employment, training, or education needs of individuals 6 with barriers to employment as defined in the federal Workforce 7 Innovation and Opportunity Act, Pub. L. No. 113-128, §3(24), 8 including but not limited to organizations that serve veterans , 9 or that provide or support competitive, integrated employment 10 for individuals with disabilities; or that serve eligible 11 youth, as defined in the federal Workforce Innovation and 12 Opportunity Act, Pub. L. No. 113-128, §3(18), including 13 representatives of organizations that serve out-of-school 14 youth, as defined in the federal Workforce Innovation and 15 Opportunity Act, Pub. L. No. 113-128, §129(a)(1)(B). 16 Sec. 31. Section 225D.1, subsection 8, Code 2017, as amended 17 by 2017 Iowa Acts, House File 215, section 1, is amended to 18 read as follows: 19 8. “Eligible individual” means a child less than fourteen 20 years of age who has been diagnosed with autism based on a 21 diagnostic assessment of autism, is not otherwise eligible for 22 coverage for applied behavioral analysis treatment or applied 23 behavior analysis treatment under the medical assistance 24 program, section 514C.28 , 514C.31 , or other private insurance 25 coverage, and whose household income does not exceed five 26 hundred percent of the federal poverty level. 27 Sec. 32. 2017 Iowa Acts, House File 488, section 57, as 28 enacted, is amended by striking the section and inserting in 29 lieu thereof the following: 30 SEC. 57. Section 455B.474, subsection 2, paragraph a, 31 subparagraph (1), Code 2017, is amended to read as follows: 32 (1) (a) Financial responsibility required by this 33 subsection may be established in accordance with rules adopted 34 by the commission by any one, or any combination, of the 35 -11- LSB 2689XC (9) 87 tm/rn 11/ 27

S.F. _____ following methods: insurance, guarantee, surety bond, letter 1 (i) Insurance. 2 (ii) Guarantee. 3 (iii) Surety bond. 4 (iv) Letter of credit , or qualification . 5 (v) Qualification as a self-insurer. 6 (b) In adopting requirements under this subsection , the 7 commission may specify policy or other contractual terms, 8 conditions, or defenses which are necessary or are unacceptable 9 in establishing the evidence of financial responsibility. 10 Sec. 33. EFFECTIVE UPON ENACTMENT. The following sections 11 of this division of this Act, being deemed of immediate 12 importance, take effect upon enactment: 13 1. The section of this division of this Act amending section 14 22.13A, subsection 5, paragraph “b”. 15 2. The section of this division of this Act amending section 16 73A.26. 17 3. The section of this division of this Act amending 18 section 84A.1A, subsection 1, paragraph “a”, subparagraph (8), 19 subparagraph division (b), subparagraph subdivision (iii). 20 Sec. 34. EFFECTIVE DATE. The section of this division of 21 this Act amending section 225D.1, subsection 8, takes effect 22 January 1, 2018. 23 DIVISION V 24 WEAPONS 25 Sec. 35. Section 724.2A, as enacted by 2017 Iowa Acts, House 26 File 517, section 5, is amended to read as follows: 27 724.2A Peace officer and reserve peace officer —— defined. 28 As used in sections 724.4, 724.6 , and 724.11 , “peace officer” 29 means a certified “peace officer” and includes a reserve peace 30 officer as defined in section 80D.1A . 31 Sec. 36. Section 724.4C, subsection 1, unnumbered paragraph 32 1, as enacted by 2017 Iowa Acts, House File 517, section 8, is 33 amended to read as follows: 34 Except as provided in subsection 2, a person commits a 35 -12- LSB 2689XC (9) 87 tm/rn 12/ 27

S.F. _____ serious misdemeanor if the person is intoxicated as provided 1 under the conditions set out in section 321J.2, subsection 2 1 , paragraph “a” , “b” , or “c” , and the person does any of the 3 following: 4 Sec. 37. Section 724.17, subsection 1, as enacted by 2017 5 Iowa Acts, House File 517, section 22, is amended to read as 6 follows: 7 1. The application for a permit to acquire pistols or 8 revolvers may be made to the sheriff of the county of the 9 applicant’s residence and shall be on a form prescribed 10 and published by the commissioner of public safety. The 11 application shall require only the full name of the applicant, 12 the driver’s license or nonoperator’s identification card 13 number of the applicant, the residence of the applicant, and 14 the date and place of birth of the applicant , and whether the 15 applicant meets the criteria specified in section 724.15 . 16 The applicant shall also display an identification card that 17 bears a distinguishing number assigned to the cardholder, the 18 full name, date of birth, sex, residence address, and brief 19 description and color photograph of the cardholder, or other 20 identification as specified by rule of the department of public 21 safety. The sheriff shall conduct a criminal history check 22 concerning each applicant by obtaining criminal history data 23 from the department of public safety which shall include an 24 inquiry of the national instant criminal background check 25 system maintained by the federal bureau of investigation or any 26 successor agency. A person who makes what the person knows 27 to be a false statement of material fact on an application 28 submitted under this section or who submits what the person 29 knows to be any materially falsified or forged documentation in 30 connection with such an application commits a class “D” felony. 31 Sec. 38. Section 724.22, subsection 9, as enacted by 2017 32 Iowa Acts, House File 517, section 29, is amended to read as 33 follows: 34 9. A parent, guardian, spouse, or instructor, who knowingly 35 -13- LSB 2689XC (9) 87 tm/rn 13/ 27

S.F. _____ provides direct supervision under subsection 5, of a person 1 while intoxicated as provided under the conditions set out 2 in section 321J.2, subsection 1, or under the influence of 3 an illegal drug paragraph “a” , “b” , or “c” , commits child 4 endangerment in violation of section 726.6, subsection 1, 5 paragraph “i” . 6 Sec. 39. Section 726.6, subsection 1, paragraph i, as 7 enacted by 2017 Iowa Acts, House File 517, section 30, is 8 amended to read as follows: 9 i. Knowingly provides direct supervision of a person under 10 section 724.22, subsection 5, while intoxicated as provided 11 under the conditions set out in section 321J.2, subsection 1, 12 or under the influence of an illegal drug paragraph “a” , “b” , 13 or “c” . 14 Sec. 40. 2017 Iowa Acts, House File 517, section 50, 15 subsection 1, as enacted, is amended to read as follows: 16 1. The section sections of this Act amending section 17 sections 724.22 and 726.6 . 18 Sec. 41. REPEAL. 2017 Iowa Acts, House File 517, section 19 16, as enacted, is repealed. 20 Sec. 42. EFFECTIVE UPON ENACTMENT. The section of this 21 division of this Act amending 2017 Iowa Acts, House File 517, 22 section 50, subsection 1, being deemed of immediate importance, 23 takes effect upon enactment. 24 Sec. 43. RETROACTIVE APPLICABILITY. The section of this 25 division of this Act amending 2017 Iowa Acts, House File 517, 26 section 50, subsection 1, applies retroactively to April 13, 27 2017. 28 DIVISION VI 29 VAPOR AND ALTERNATIVE NICOTINE PRODUCTS —— TAX 30 Sec. 44. Section 453A.1, Code 2017, is amended by adding the 31 following new subsection: 32 NEW SUBSECTION . 7A. “Delivery sale” means any sale of 33 an alternative nicotine product or a vapor product to a 34 purchaser in this state where the purchaser submits the order 35 -14- LSB 2689XC (9) 87 tm/rn 14/ 27

S.F. _____ for such sale by means of a telephonic or other method of 1 voice transmission, mail or any other delivery service, or the 2 internet or other online service and the alternative nicotine 3 product or vapor product is delivered by use of mail or a 4 delivery service. The sale of an alternative nicotine product 5 or vapor product shall constitute a delivery sale regardless of 6 whether the seller is located in this state. “Delivery sale” 7 does not include a sale to a distributor or retailer of any 8 alternative nicotine product or vapor product not for personal 9 consumption. 10 Sec. 45. Section 453A.1, subsection 20, Code 2017, is 11 amended to read as follows: 12 20. “Place of business” is construed to mean and include any 13 place where cigarettes are sold or where cigarettes are stored 14 within or without the state of Iowa by the holder of an Iowa 15 permit or kept for the purpose of sale or consumption; or if 16 sold from any vehicle or train, the vehicle or train on which 17 or from which such cigarettes are sold shall constitute a place 18 of business ; or for a business within or without the state that 19 conducts delivery sales, any place where alternative nicotine 20 products or vapor products are sold or where alternative 21 nicotine products or vapor products are kept for the purpose 22 of sale . 23 Sec. 46. Section 453A.13, subsection 1, Code 2017, is 24 amended to read as follows: 25 1. Permits required. Every distributor, wholesaler, 26 cigarette vendor, and retailer, now engaged or who desires to 27 become engaged in the sale or use of cigarettes, upon which a 28 tax is required to be paid, and every retailer now engaged or 29 who desires to become engaged in selling, offering for sale, or 30 distributing alternative nicotine products or vapor products , 31 including through delivery sales, shall obtain a state or 32 retail permit as a distributor, wholesaler, cigarette vendor, 33 or retailer, as the case may be. 34 Sec. 47. Section 453A.13, subsection 2, paragraph a, Code 35 -15- LSB 2689XC (9) 87 tm/rn 15/ 27

S.F. _____ 2017, is amended to read as follows: 1 a. The department shall issue state permits to distributors, 2 wholesalers, and cigarette vendors and retailers that make 3 delivery sales of alternative nicotine products and vapor 4 products subject to the conditions provided in this division . 5 If an out-of-state retailer makes delivery sales of alternative 6 nicotine products or vapor products, an application shall be 7 filed with the department and a permit shall be issued for the 8 out-of-state retailer’s principal place of business. Cities 9 may issue retail permits to dealers retailers with a place of 10 business located within their respective limits. County boards 11 of supervisors may issue retail permits to dealers retailers 12 with a place of business in their respective counties, outside 13 of the corporate limits of cities. 14 Sec. 48. Section 453A.42, Code 2017, is amended by adding 15 the following new subsection: 16 NEW SUBSECTION . 2A. “Delivery sale” means any sale of 17 an alternative nicotine product or a vapor product to a 18 purchaser in this state where the purchaser submits the order 19 for such sale by means of a telephonic or other method of 20 voice transmission, mail or any other delivery service, or the 21 internet or other online service and the alternative nicotine 22 product or vapor product is delivered by use of mail or a 23 delivery service. The sale of an alternative nicotine product 24 or vapor product shall constitute a delivery sale regardless of 25 whether the seller is located in this state. “Delivery sale” 26 does not include a sale to a distributor or retailer of any 27 alternative nicotine product or vapor product not for personal 28 consumption. 29 Sec. 49. Section 453A.42, subsection 8, Code 2017, is 30 amended to read as follows: 31 8. “Place of business” means any place where tobacco 32 products are sold or where tobacco products are manufactured, 33 stored, or kept for the purpose of sale or consumption, 34 including any vessel, vehicle, airplane, train, or vending 35 -16- LSB 2689XC (9) 87 tm/rn 16/ 27

S.F. _____ machine ; or for a business within or without the state that 1 conducts delivery sales, any place where alternative nicotine 2 products or vapor products are sold or where alternative 3 nicotine products or vapor products are kept for the purpose of 4 sale, including delivery sales . 5 Sec. 50. Section 453A.47A, subsections 1, 3, and 6, Code 6 2017, are amended to read as follows: 7 1. Permits required. A person shall not engage in 8 the business of a retailer of tobacco, tobacco products, 9 alternative nicotine products, or vapor products at any place 10 of business , or through delivery sales, without first having 11 received a permit as a retailer. 12 3. Number of permits. An application shall be filed and a 13 permit obtained for each place of business owned or operated by 14 a retailer located in the state . If an out-of-state retailer 15 makes delivery sales of alternative nicotine products or vapor 16 products, an application shall be filed with the department 17 and a permit shall be issued for the out-of-state retailer’s 18 principal place of business. 19 6. Issuance. Cities shall may issue retail permits to 20 retailers located within their respective limits. County 21 boards of supervisors shall may issue retail permits to 22 retailers located in their respective counties, outside of the 23 corporate limits of cities. The city or county shall submit a 24 duplicate of any application for a retail permit and any retail 25 permit issued by the entity under this section to the alcoholic 26 beverages division of the department of commerce within thirty 27 days of issuance. The alcoholic beverages division of the 28 department of commerce shall submit the current list of all 29 retail permits issued to the Iowa department of public health 30 by the first day of each quarter of a state fiscal year. 31 Sec. 51. NEW SECTION . 453A.47B Requirements for mailing or 32 shipping —— alternative nicotine products or vapor products. 33 1. A retailer shall not mail, ship, or otherwise cause to 34 be delivered any alternative nicotine product or vapor product 35 -17- LSB 2689XC (9) 87 tm/rn 17/ 27

S.F. _____ in connection with a delivery sale unless all of the following 1 apply: 2 a. Prior to sale to the purchaser, the retailer verifies 3 that the purchaser is at least eighteen years of age through or 4 by one of the following: 5 (1) A commercially available database, or aggregate of 6 databases, that is regularly used by government and businesses 7 for the purpose of age and identity verification. 8 (2) Obtaining a copy of a valid government-issued document 9 that provides the name, address, and date of birth of the 10 purchaser. 11 b. The retailer uses a method of mailing, shipping, or 12 delivery that requires the signature of a person who is at 13 least eighteen years of age before the shipping package is 14 released to the purchaser. 15 Sec. 52. NEW SECTION . 453A.47C Sales and use tax on 16 delivery sales —— alternative nicotine products or vapor 17 products. 18 1. A delivery sale of alternative nicotine products or vapor 19 products within this state shall be subject to the sales tax 20 provided in chapter 423, subchapter II. 21 2. The use in this state of alternative nicotine products 22 or vapor products purchased for use in this state through a 23 delivery sale shall be subject to the use tax provided in 24 chapter 423, subchapter III. 25 3. A retailer required to possess or possessing a permit 26 under section 453A.13 or 453A.47A to make delivery sales of 27 alternative nicotine products or vapor products within this 28 state shall be deemed to have waived all claims that such 29 retailer lacks physical presence within this state for purposes 30 of collecting and remitting sales and use tax. 31 4. A retailer making taxable delivery sales of alternative 32 nicotine products or vapor products within this state shall 33 remit to the department all sales and use tax due on such sales 34 at the times and in the manner provided by chapter 423. 35 -18- LSB 2689XC (9) 87 tm/rn 18/ 27