House Study Bill 657 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED GOVERNOR BILL) A BILL FOR An Act relating to state and local revenue and finances 1 including modifying individual income taxes, sales and 2 use taxes, water service tax, and certain tax credits and 3 provisions relating to county juvenile court expenses and 4 mental health region funding, making appropriations, and 5 including effective date and applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5731XL (18) 88 jm/jh

S.F. _____ H.F. _____ DIVISION I 1 INDIVIDUAL INCOME TAXES BEGINNING 2021 TAX YEAR 2 Section 1. Section 422.5A, Code 2020, is amended by striking 3 the section and inserting in lieu thereof the following: 4 422.5A Tax rates. 5 The tax imposed in section 422.5 shall be calculated at the 6 following rates: 7 1. On all taxable income from 0 through $3,364, the rate of 8 0.30 percent. 9 2. On all taxable income exceeding $3,364 but not exceeding 10 $6,728, the rate of 2.00 percent. 11 3. On all taxable income exceeding $6,728 but not exceeding 12 $15,138, the rate of 3.73 percent. 13 4. On all taxable income exceeding $15,138 but not exceeding 14 $25,230, the rate of 5.07 percent. 15 5. On all taxable income exceeding $25,230 but not exceeding 16 $33,640, the rate of 5.36 percent. 17 6. On all taxable income exceeding $33,640 but not exceeding 18 $50,460, the rate of 5.63 percent. 19 7. On all taxable income exceeding $50,460 but not exceeding 20 $75,690, the rate of 6.97 percent. 21 8. On all taxable income exceeding $75,690, the rate of 7.48 22 percent. 23 Sec. 2. EFFECTIVE DATE. This division of this Act takes 24 effect January 1, 2021. 25 Sec. 3. APPLICABILITY. This division of this Act applies 26 to tax years beginning on or after January 1, 2021, but before 27 the contingent effective date in 2018 Iowa Acts, chapter 1161, 28 section 133. 29 DIVISION II 30 CONTINGENT EFFECTIVE DATE IN 2018 IOWA ACTS —— NET GENERAL FUND 31 REVENUES CALCULATION 32 Sec. 4. 2018 Iowa Acts, chapter 1161, section 133, 33 subsection 1, unnumbered paragraph 1, is amended to read as 34 follows: 35 -1- LSB 5731XL (18) 88 jm/jh 1/ 46

S.F. _____ H.F. _____ This division of this Act takes effect on January 1, 2023, if 1 both of the following conditions are the following condition 2 is satisfied: 3 Sec. 5. 2018 Iowa Acts, chapter 1161, section 133, 4 subsection 1, paragraph b, is amended by striking the 5 paragraph. 6 Sec. 6. 2018 Iowa Acts, chapter 1161, section 133, 7 subsection 2, unnumbered paragraph 1, is amended to read as 8 follows: 9 If the provisions of subsection 1 are is not satisfied and 10 this division of this Act does not take effect on January 1, 11 2023, then this division of this Act shall take effect on 12 January 1 following the first fiscal year for which both of the 13 following conditions are the following condition is satisfied: 14 Sec. 7. 2018 Iowa Acts, chapter 1161, section 133, 15 subsection 2, paragraph b, is amended by striking the 16 paragraph. 17 DIVISION III 18 FUTURE CONTINGENT INDIVIDUAL INCOME TAXES BEGINNING IN 2023 TAX 19 YEAR 20 Sec. 8. 2018 Iowa Acts, chapter 1161, section 107, is 21 amended to read as follows: 22 SEC. 107. Section 422.5A , as enacted in this Act, is amended 23 by striking the section and inserting in lieu thereof the 24 following: 25 422.5A Tax rates. 26 1. The tax imposed in section 422.5 shall be calculated 27 at the following rates in the case of a married couple filing 28 jointly: 29 a. On all taxable income from 0 through $12,000, the rate of 30 4.40 4.0 percent. 31 b. On all taxable income exceeding $12,000 but not exceeding 32 $60,000, the rate of 4.82 4.45 percent. 33 c. On all taxable income exceeding $60,000 but not exceeding 34 $150,000, the rate of 5.70 4.99 percent. 35 -2- LSB 5731XL (18) 88 jm/jh 2/ 46

S.F. _____ H.F. _____ d. On all taxable income exceeding $150,000, the rate of 1 6.50 5.5 percent. 2 2. The tax imposed in section 422.5 shall be calculated at 3 the following rates in the case of any taxpayer other than a 4 married couple filing jointly: 5 a. On all taxable income from 0 through $6,000, the rate of 6 4.40 4.0 percent. 7 b. On all taxable income exceeding $6,000 but not exceeding 8 $30,000, the rate of 4.82 4.45 percent. 9 c. On all taxable income exceeding $30,000 but not exceeding 10 $75,000, the rate of 5.70 4.99 percent. 11 d. On all taxable income exceeding $75,000, the rate of 6.50 12 5.5 percent. 13 DIVISION IV 14 CHILD AND DEPENDENT CARE AND EARLY CHILDHOOD TAX CREDITS 15 Sec. 9. Section 422.12C, subsection 1, paragraphs f and g, 16 Code 2020, are amended to read as follows: 17 f. For a taxpayer with net income of forty thousand dollars 18 or more but less than forty-five ninety thousand dollars, 19 thirty percent. 20 g. For a taxpayer with net income of forty-five ninety 21 thousand dollars or more, zero percent. 22 Sec. 10. Section 422.12C, subsection 2, paragraph a, Code 23 2020, is amended to read as follows: 24 a. The taxes imposed under this division , less the amounts 25 of nonrefundable credits allowed under this division , may be 26 reduced by an early childhood development tax credit equal to 27 twenty-five percent of the first one thousand dollars which 28 the taxpayer has paid to others for each dependent, as defined 29 in the Internal Revenue Code, ages three through five for 30 early childhood development expenses. In determining the 31 amount of early childhood development expenses for the tax year 32 beginning in the 2006 calendar year only, such expenses paid 33 during November and December of the previous tax year shall 34 be considered paid in the tax year for which the tax credit 35 -3- LSB 5731XL (18) 88 jm/jh 3/ 46

S.F. _____ H.F. _____ is claimed. This credit is available to a taxpayer whose net 1 income is less than forty-five ninety thousand dollars. If the 2 early childhood development tax credit is claimed for a tax 3 year, the taxpayer and the taxpayer’s spouse shall not claim 4 the child and dependent care credit under subsection 1 . 5 Sec. 11. APPLICABILITY. This division of this Act applies 6 to tax years beginning on or after January 1, 2021. 7 DIVISION V 8 PRECEPTOR TAX CREDIT 9 Sec. 12. NEW SECTION . 135.39E Preceptor tax credit. 10 1. As used in this section, unless the context otherwise 11 requires: 12 a. “Preceptor” means a licensed practicing physician who 13 provides on-site education to a medical student or resident at 14 a hospital or medical clinic in a rural area. 15 b. “Rural area” means any county in the state other than 16 the ten largest counties according to the most recent federal 17 decennial census. 18 2. An eligible preceptor may apply to the department for 19 tax credits under this section. The tax credit may be applied 20 against income tax imposed under chapter 422, division II. The 21 amount of the credit equals one thousand dollars per medical 22 student or resident supervised by the preceptor up to a maximum 23 of ten thousand dollars per year. 24 3. Any credit in excess of the tax liability is 25 nonrefundable and shall not be credited to the tax liability 26 for any following year. 27 4. The credits shall be issued by the department on a 28 first-come, first-served basis until the maximum amount of the 29 tax credits authorized in subsection 5 is reached. 30 5. The cumulative value of tax credits annually claimed 31 shall not exceed one hundred thousand dollars. 32 6. The department in collaboration with the department of 33 revenue shall develop a system for the application, review, and 34 authorization of tax credits issued pursuant to this section. 35 -4- LSB 5731XL (18) 88 jm/jh 4/ 46

S.F. _____ H.F. _____ 7. The department and the department of revenue shall each 1 adopt rules pursuant to chapter 17A to jointly administer 2 this section, including establishing the number of hours a 3 preceptor must supervise a medical student or resident in order 4 to qualify for the tax credit. 5 Sec. 13. NEW SECTION . 422.12O Preceptor tax credit. 6 The taxes imposed under this division, less the credits 7 allowed under section 422.12, shall be reduced by the preceptor 8 tax credit allowed under section 135.39E. 9 Sec. 14. APPLICABILITY. This division of this Act applies 10 to tax years beginning on or after January 1, 2021. 11 DIVISION VI 12 SALES AND USE TAXES 13 Sec. 15. Section 423.2, subsection 1, unnumbered paragraph 14 1, Code 2020, is amended to read as follows: 15 There is imposed a tax of six percent at the rate specified 16 in subsection 12 upon the sales price of all sales of tangible 17 personal property, consisting of goods, wares, or merchandise, 18 sold at retail in the state to consumers or users except as 19 otherwise provided in this subchapter . 20 Sec. 16. Section 423.2, subsections 2 and 3, Code 2020, are 21 amended to read as follows: 22 2. A tax of six percent at the rate specified in subsection 23 12 is imposed upon the sales price of the sale or furnishing 24 of gas, electricity, water, heat, pay television service, and 25 communication service, including the sales price from such 26 sales by any municipal corporation or joint water utility 27 furnishing gas, electricity, water, heat, pay television 28 service, and communication service to the public in its 29 proprietary capacity, except as otherwise provided in this 30 subchapter , when sold at retail in the state to consumers or 31 users. 32 3. A tax of six percent at the rate specified in subsection 33 12 is imposed upon the sales price of all sales of tickets 34 or admissions to places of amusement, fairs, and athletic 35 -5- LSB 5731XL (18) 88 jm/jh 5/ 46

S.F. _____ H.F. _____ events except those of elementary and secondary educational 1 institutions. A tax of six percent at the rate specified in 2 subsection 12 is imposed on the sales price of an entry fee or 3 like charge imposed solely for the privilege of participating 4 in an activity at a place of amusement, fair, or athletic event 5 unless the sales price of tickets or admissions charges for 6 observing the same activity are taxable under this subchapter . 7 A tax of six percent at the rate specified in subsection 12 8 is imposed upon that part of private club membership fees or 9 charges paid for the privilege of participating in any athletic 10 sports provided club members. 11 Sec. 17. Section 423.2, subsection 4, paragraph a, Code 12 2020, is amended to read as follows: 13 a. A tax of six percent at the rate specified in subsection 14 12 is imposed upon the sales price derived from the operation 15 of all forms of amusement devices and games of skill, games of 16 chance, raffles, and bingo games as defined in chapter 99B , and 17 card game tournaments conducted under section 99B.27 , that are 18 operated or conducted within the state, the tax to be collected 19 from the operator in the same manner as for the collection of 20 taxes upon the sales price of tickets or admission as provided 21 in this section . Nothing in this subsection shall legalize any 22 games of skill or chance or slot-operated devices which are now 23 prohibited by law. 24 Sec. 18. Section 423.2, subsection 5, Code 2020, is amended 25 to read as follows: 26 5. There is imposed a tax of six percent at the rate 27 specified in subsection 12 upon the sales price from the 28 furnishing of services as defined in section 423.1 . 29 Sec. 19. Section 423.2, subsection 7, paragraph a, 30 unnumbered paragraph 1, Code 2020, is amended to read as 31 follows: 32 A tax of six percent at the rate specified in subsection 12 33 is imposed upon the sales price from the sales, furnishing, or 34 service of solid waste collection and disposal service. 35 -6- LSB 5731XL (18) 88 jm/jh 6/ 46

S.F. _____ H.F. _____ Sec. 20. Section 423.2, subsection 8, paragraph a, Code 1 2020, is amended to read as follows: 2 a. A tax of six percent at the rate specified in subsection 3 12 is imposed on the sales price from sales of bundled 4 transactions. For the purposes of this subsection , a “bundled 5 transaction” is the retail sale of two or more distinct and 6 identifiable products, except real property and services to 7 real property, which are sold for one nonitemized price. A 8 “bundled transaction” does not include the sale of any products 9 in which the sales price varies, or is negotiable, based on 10 the selection by the purchaser of the products included in the 11 transaction. 12 Sec. 21. Section 423.2, subsection 9, Code 2020, is amended 13 to read as follows: 14 9. A tax of six percent at the rate specified in 15 subsection 12 is imposed upon the sales price from any mobile 16 telecommunications service, including all paging services, 17 that this state is allowed to tax pursuant to the provisions 18 of the federal Mobile Telecommunications Sourcing Act, Pub. 19 L. No. 106-252, 4 U.S.C. §116 et seq. For purposes of this 20 subsection , taxes on mobile telecommunications service, as 21 defined under the federal Mobile Telecommunications Sourcing 22 Act that are deemed to be provided by the customer’s home 23 service provider, shall be paid to the taxing jurisdiction 24 whose territorial limits encompass the customer’s place of 25 primary use, regardless of where the mobile telecommunications 26 service originates, terminates, or passes through and 27 shall in all other respects be taxed in conformity with 28 the federal Mobile Telecommunications Sourcing Act. All 29 other provisions of the federal Mobile Telecommunications 30 Sourcing Act are adopted by the state of Iowa and incorporated 31 into this subsection by reference. With respect to mobile 32 telecommunications service under the federal Mobile 33 Telecommunications Sourcing Act, the director shall, if 34 requested, enter into agreements consistent with the provisions 35 -7- LSB 5731XL (18) 88 jm/jh 7/ 46

S.F. _____ H.F. _____ of the federal Act. 1 Sec. 22. Section 423.2, subsection 10, paragraph a, Code 2 2020, is amended to read as follows: 3 a. A tax of six percent at the rate specified in subsection 4 12 is imposed on the sales price of specified digital products 5 sold at retail in the state. The tax applies whether the 6 purchaser obtains permanent use or less than permanent use of 7 the specified digital product, whether the sale is conditioned 8 or not conditioned upon continued payment from the purchaser, 9 and whether the sale is on a subscription basis or is not on a 10 subscription basis. 11 Sec. 23. Section 423.2, subsection 12, Code 2020, is amended 12 by striking the subsection and inserting in lieu thereof the 13 following: 14 12. a. For the period beginning January 1, 2021, and ending 15 December 31, 2051, the sales tax rate is seven percent. 16 b. Beginning January 1, 2051, the sales tax rate is six 17 percent. 18 Sec. 24. Section 423.2A, subsection 2, Code 2020, is amended 19 by adding the following new paragraph: 20 NEW PARAGRAPH . 0b. Transfer one-seventh of the remaining 21 revenues to the secure an advanced vision for education fund 22 created in section 423F.2. This paragraph “0b” is repealed 23 January 1, 2051. 24 Sec. 25. Section 423.2A, subsection 2, paragraph b, Code 25 2020, is amended to read as follows: 26 b. Transfer from the remaining revenues the amounts required 27 under Article VII, section 10, of the Constitution of the State 28 of Iowa to the natural resources and outdoor recreation trust 29 fund created in section 461.31 , if applicable . 30 Sec. 26. Section 423.2A, subsection 2, paragraph c, Code 31 2020, is amended by striking the paragraph. 32 Sec. 27. Section 423.2A, subsection 2, paragraph d, Code 33 2020, is amended to read as follows: 34 d. Transfer to the baseball and softball complex sales tax 35 -8- LSB 5731XL (18) 88 jm/jh 8/ 46

S.F. _____ H.F. _____ rebate fund that portion of the sales tax receipts described 1 in subsection 1 , paragraph “b” , remaining after the transfers 2 required under paragraphs “a” , “0b” , and “b” , and “c” of this 3 subsection 2 . This paragraph is repealed thirty days following 4 the date on which five million dollars in total rebates have 5 been provided under section 423.4, subsection 10 . 6 Sec. 28. Section 423.5, subsection 1, unnumbered paragraph 7 1, Code 2020, is amended to read as follows: 8 Except as provided in paragraph “c” , an excise tax at the 9 rate of six percent specified in subsection 4 of the purchase 10 price or installed purchase price is imposed on the following: 11 Sec. 29. Section 423.5, subsection 4, Code 2020, is amended 12 by striking the subsection and inserting in lieu thereof the 13 following: 14 4. a. For the period beginning January 1, 2021, and ending 15 December 31, 2051, the use tax rate is seven percent. 16 b. Beginning January 1, 2051, the use tax rate is six 17 percent. 18 Sec. 30. Section 423.43, subsection 1, paragraph b, Code 19 2020, is amended to read as follows: 20 b. Subsequent to the deposit into the general fund of 21 the state and after the transfer of such revenues collected 22 under chapter 423B , the department shall transfer one-sixth 23 one-seventh of such remaining revenues to the secure an 24 advanced vision for education fund created in section 423F.2 . 25 This paragraph is repealed January 1, 2051. 26 Sec. 31. EFFECTIVE DATE. This division of this Act takes 27 effect January 1, 2021. 28 DIVISION VII 29 WATER SERVICE TAX REPEAL 30 Sec. 32. Section 421.71, subsection 3, Code 2020, is amended 31 to read as follows: 32 3. Private cause of action immunity for overpayment of 33 certain taxes. 34 a. A taxpayer, or any person required to collect taxes 35 -9- LSB 5731XL (18) 88 jm/jh 9/ 46

S.F. _____ H.F. _____ imposed under chapters 423 , 423A , 423B , 423C , and 423D , and 1 chapter 423G , Code 2020, shall be immune from any private cause 2 of action arising from or related to the overpayment of taxes 3 imposed under chapters 423 , 423A , 423B , 423C , and 423D , and 4 chapter 423G , Code 2020, that are collected and remitted to the 5 department. 6 b. Nothing in this subsection shall apply to or otherwise 7 limit any of the following: 8 (1) Any claim, action, mandate, power, remedy, or 9 discretion of the department, or an agent or designee of the 10 department. 11 (2) A taxpayer’s right to seek a refund from the department 12 related to taxes imposed under chapters 423 , 423A , 423B , 423C , 13 and 423D , and chapter 423G , and Code 2020, that are collected 14 from or paid by the taxpayer. 15 Sec. 33. Section 423G.7, Code 2020, is amended by striking 16 the section and inserting in lieu thereof the following: 17 423G.7 Repeal. 18 This chapter is repealed January 1, 2021. 19 Sec. 34. EFFECTIVE DATE. This division of this Act takes 20 effect January 1, 2021. 21 DIVISION VIII 22 SALES AND USE TAX EXEMPTIONS 23 Sec. 35. Section 423.3, subsection 68, paragraph c, 24 subparagraph (1), subparagraph division (a), Code 2020, is 25 amended to read as follows: 26 (a) “Clothing” includes but is not limited to the 27 following: aprons, household and shop; athletic supporters; 28 baby receiving blankets; bathing suits and caps; beach capes 29 and coats; belts and suspenders; boots; coats and jackets; 30 costumes; diapers (children and adults, including disposable 31 diapers); earmuffs; footlets; formal wear; garters and garter 32 belts; girdles; gloves and mittens for general use; hats 33 and caps; hosiery; insoles for shoes; lab coats; neckties; 34 overshoes; pantyhose; rainwear; rubber pants; sandals; 35 -10- LSB 5731XL (18) 88 jm/jh 10/ 46

S.F. _____ H.F. _____ scarves; shoes and shoelaces; slippers; sneakers; socks and 1 stockings; steel-toed shoes; underwear; uniforms, athletic and 2 nonathletic; and wedding apparel. 3 Sec. 36. Section 423.3, Code 2019, is amended by adding the 4 following new subsections: 5 NEW SUBSECTION . 107. The sales price from the sale of 6 feminine hygiene products. For purposes of this subsection, 7 “feminine hygiene products” means sanitary napkins, tampons, or 8 other similar items used for feminine hygiene. 9 NEW SUBSECTION . 108. The sales price from the sale of a 10 child or adult diaper, whether cloth or disposable. 11 Sec. 37. EFFECTIVE DATE. This division of this Act takes 12 effect January 1, 2021. 13 DIVISION IX 14 JUVENILE COURT EXPENSES 15 Sec. 38. Section 232.141, subsection 2, unnumbered 16 paragraph 1, Code 2020, is amended to read as follows: 17 All of the following juvenile court expenses are a charge 18 upon the county in which the proceedings are held, to the 19 extent provided in subsection 3 shall be paid from the indigent 20 defense fund established in section 815.11 in accordance with 21 this chapter and chapters 13B and 815 : 22 Sec. 39. Section 232.141, subsections 3 and 7, Code 2020, 23 are amended by striking the subsections. 24 Sec. 40. Section 602.1302, subsection 4, Code 2020, is 25 amended to read as follows: 26 4. The judicial branch shall reimburse counties for the 27 costs of witness and mileage fees and for attorney fees to the 28 extent paid pursuant to section 232.141, subsection 1 . 29 Sec. 41. Section 602.1303, subsection 4, Code 2020, is 30 amended to read as follows: 31 4. A county shall pay the costs incurred in connection with 32 the administration of juvenile justice to the extent provided 33 under section 232.141 . 34 Sec. 42. Section 815.11, Code 2020, is amended to read as 35 -11- LSB 5731XL (18) 88 jm/jh 11/ 46

S.F. _____ H.F. _____ follows: 1 815.11 Appropriations for indigent defense —— fund created. 2 Costs incurred for legal representation by a court-appointed 3 attorney under chapter 229A , 665 , 822 , or 908 , or section 4 232.141, subsection 3 , paragraph “d” 2 , or section 598.23A , 5 600A.6B , 814.9 , 814.10 , 814.11 , 815.4 , 815.7 , or 815.10 on 6 behalf of an indigent shall be paid from moneys appropriated 7 by the general assembly to the office of the state public 8 defender in the department of inspections and appeals and 9 deposited in an account to be known as the indigent defense 10 fund. Costs incurred representing an indigent defendant in 11 a contempt action, or representing an indigent juvenile in a 12 juvenile court proceeding, are also payable from the fund. 13 However, costs incurred in any administrative proceeding or in 14 any other proceeding under this chapter or chapter 598 , 600 , 15 600A , 633 , 633A , 814 , or 915 or other provisions of the Code or 16 administrative rules are not payable from the fund. 17 DIVISION X 18 MENTAL HEALTH REGION FUNDING 19 Sec. 43. Section 225C.4, subsection 1, paragraph i, Code 20 2020, is amended by striking the paragraph. 21 Sec. 44. Section 225C.7A, Code 2020, is amended by striking 22 the section and inserting in lieu thereof the following: 23 225C.7A Mental health and disability services state 24 supplement fund. 25 1. A mental health and disability services state supplement 26 fund is created in the office of the treasurer of state under 27 the authority of the department. The fund shall be separate 28 from the general fund of the state and the balance in the fund 29 shall not be considered part of the balance of the general fund 30 of the state. Moneys in the fund include appropriations made 31 to the fund, and other moneys deposited into the fund. Moneys 32 in the fund shall be used solely for purposes of making state 33 supplement payments under this section. For each fiscal year 34 beginning on or after July 1, 2020, the moneys available in a 35 -12- LSB 5731XL (18) 88 jm/jh 12/ 46

S.F. _____ H.F. _____ fiscal year in the mental health and disability services state 1 supplement fund are appropriated to the department and shall 2 be distributed to each county on a per capita basis calculated 3 using each county’s population, as defined in section 331.424A, 4 for that fiscal year. 5 2. For a county to be eligible to receive a state supplement 6 payment under this section, the county, or the county’s mental 7 health and disability services region on behalf of the county, 8 shall submit a core services domain report to the department 9 on or before a date established by the department by rule. 10 The contents of the report, to be determined by rule of the 11 department in consultation with the commission, shall enable 12 the department to evaluate, along with other information 13 available to the department, including annual reports and 14 annual service and budget plans submitted under section 15 331.393, whether each county or the county’s mental health 16 and disability services region is in substantial compliance 17 with the required core service domains under section 331.397, 18 subsection 4, and section 331.397A, subsection 4. On or before 19 a date established by the department by rule, the department 20 shall review all core service domain reports and notify each 21 county of the results of the review. If the county is not in 22 substantial compliance with the required core service domains 23 under section 331.397, subsection 4, and section 331.397A, 24 subsection 4, and the county or the county’s region has 25 failed to comply with the corrective action plan under section 26 331.389, subsection 5, paragraph “a” , the department shall 27 reduce the amount of the state supplement payment by an amount 28 commensurate with the level of noncompliance, not to exceed 29 fifteen percent of the state supplement payment amount pursuant 30 to section 331.389, subsection 5, paragraph “b” . 31 3. State supplement payments received by a county shall be 32 deposited in the county services fund under section 331.424A 33 and used solely for the purposes authorized in section 34 331.424A, subsection 3. 35 -13- LSB 5731XL (18) 88 jm/jh 13/ 46

S.F. _____ H.F. _____ Sec. 45. Section 249N.8, subsection 1, Code 2020, is amended 1 to read as follows: 2 1. Biennially, a report of the results of a review, by 3 county and region, of mental health services previously funded 4 through taxes levied by counties pursuant to section 331.424A , 5 that are funded during the reporting period under the Iowa 6 health and wellness plan. 7 Sec. 46. Section 331.389, subsection 5, paragraph b, Code 8 2020, is amended to read as follows: 9 b. Reduce the amount of the annual state funding provided 10 for the regional service system, including state supplement 11 payment amounts under section 225C.7A, not to exceed fifteen 12 percent of the amount. 13 Sec. 47. Section 331.391, subsection 3, Code 2020, is 14 amended by striking the subsection. 15 Sec. 48. Section 331.398, subsection 1, Code 2020, is 16 amended to read as follows: 17 1. The financing of a regional mental health and disability 18 service system is limited to a fixed budget amount. The fixed 19 budget amount shall be the amount identified in a regional 20 service system management plan and budget for the fiscal year. 21 A region shall receive state funding for growth in non-Medicaid 22 expenditures through the mental health and disability regional 23 services fund created in section 225C.7A to address increased 24 service costs, additional service populations, additional core 25 service domains, and increased numbers of persons receiving 26 services. 27 Sec. 49. Section 331.424A, subsection 1, paragraphs a and g, 28 Code 2020, are amended by striking the paragraphs. 29 Sec. 50. Section 331.424A, subsection 1, paragraph h, Code 30 2020, is amended to read as follows: 31 h. “Statewide per capita expenditure target amount” means 32 forty-seven twelve dollars and twenty-eight fifty cents. 33 Sec. 51. Section 331.424A, subsection 5, Code 2020, is 34 amended to read as follows: 35 -14- LSB 5731XL (18) 88 jm/jh 14/ 46

S.F. _____ H.F. _____ 5. Receipts from the state or federal government for the 1 mental health and disability services administered or paid for 2 by a county shall be credited to the county services fund, 3 including moneys distributed to the county from the department 4 of human services under section 225C.7A and moneys allocated 5 under chapter 426B . 6 Sec. 52. Section 331.424A, subsection 8, Code 2020, is 7 amended by striking the subsection. 8 Sec. 53. Section 331.424A, subsection 9, Code 2020, is 9 amended to read as follows: 10 9. a. For the fiscal year beginning July 1, 2017 2020 , 11 and each subsequent fiscal year, the county budgeted amount 12 determined for each county shall be the amount necessary to 13 meet the county’s financial obligations for the payment of 14 services provided under the regional service system management 15 plan approved pursuant to section 331.393 , not to exceed an 16 amount equal to the product of the regional statewide per 17 capita expenditure target amount multiplied by the county’s 18 population, and, for fiscal years beginning on or after July 1, 19 2023, reduced by the amount of the county’s cash flow reduction 20 amount for the fiscal year calculated under subsection 4 , if 21 applicable. 22 b. If a county officially joins a different region, the 23 county’s budgeted amount shall be the amount necessary to meet 24 the county’s financial obligations for payment of services 25 provided under the new region’s regional service system 26 management plan approved pursuant to section 331.393 , not to 27 exceed an amount equal to the product of the new region’s 28 regional per capita expenditure target amount multiplied by 29 the county’s population, and, for fiscal years beginning on 30 or after July 1, 2023, reduced by the amount of the county’s 31 cash flow reduction amount for the fiscal year calculated under 32 subsection 4 , if applicable. 33 Sec. 54. Section 347.7, subsection 1, paragraph c, Code 34 2020, is amended to read as follows: 35 -15- LSB 5731XL (18) 88 jm/jh 15/ 46

S.F. _____ H.F. _____ c. For the fiscal years beginning July 1, 2017, July 1, 1 2018, and July 1, 2019, if a county public hospital is located 2 in a county having a population of two hundred twenty-five 3 thousand or over and having a county budgeted amount for the 4 fiscal year under section 331.424A, subsection 9 , Code 2020, 5 equal to the product of the regional per capita expenditure 6 target amount multiplied by the county’s population, as those 7 terms are defined in section 331.424A , Code 2020, the board 8 of trustees shall appropriate for payment on July 1 of each 9 such fiscal year from the county public hospital fund to the 10 board of supervisors for deposit in the county services fund 11 created pursuant to section 331.424A , two million eight hundred 12 thousand dollars, and the county public hospital shall, in each 13 such fiscal year, contract with the county in which the county 14 public hospital is located to provide care and treatment to 15 patients who are residents of the county and whose costs for 16 such care and treatment would otherwise qualify for payment 17 from the county services fund under section 331.424A , in an 18 amount equal to three million five hundred thousand dollars. 19 Sec. 55. COUNTY BUDGET RECERTIFICATION —— REGIONAL SERVICE 20 SYSTEM MANAGEMENT PLAN AMENDMENT —— TAXES CERTIFIED. 21 1. If this Act takes effect on or after March 31, 2020, 22 notwithstanding section 24.17, for the fiscal year beginning 23 July 1, 2020, a county may recertify the county’s budget as 24 necessary to implement the provisions of this division of this 25 Act. A budget recertified pursuant to this section must be 26 recertified in duplicate to the county auditor not later than 27 thirty days after the effective date of this division of this 28 Act, and protests to the budget shall be filed not later than 29 ten days after the county’s budget is recertified. 30 2. To the extent necessary to implement the provisions 31 of this division of this Act, a mental health and disability 32 services region may amend the region’s regional service system 33 management plan or annual service and budget plan approved 34 under section 331.393 for the fiscal year beginning July 1, 35 -16- LSB 5731XL (18) 88 jm/jh 16/ 46

S.F. _____ H.F. _____ 2020. 1 3. To the extent necessary to implement the provisions of 2 this division of this Act, the department of management may, 3 notwithstanding section 24.17, for the fiscal year beginning 4 July 1, 2020, certify the taxes back to the applicable county 5 auditor after June 15. 6 Sec. 56. EMERGENCY RULES. The department of human services 7 may adopt emergency rules under section 17A.4, subsection 3, 8 and section 17A.5, subsection 2, paragraph “b”, to implement 9 the provisions of this division of this Act and the rules shall 10 be effective immediately upon filing unless a later date is 11 specified in the rules. Any rules adopted in accordance with 12 this section shall also be published as a notice of intended 13 action as provided in section 17A.4. 14 Sec. 57. APPLICABILITY. This division of this Act applies 15 July 1, 2020, for fiscal years beginning on or after that date. 16 Sec. 58. EFFECTIVE DATE. This division of this Act, being 17 deemed of immediate importance, takes effect upon enactment. 18 DIVISION XI 19 NATURAL RESOURCES AND OUTDOOR RECREATION TRUST FUND 20 Sec. 59. Section 2.45, Code 2020, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 5A. a. The legislative natural resources 23 and outdoor recreation trust fund review committee which 24 shall be composed of ten members of the general assembly, 25 consisting of five members from each chamber, to be appointed 26 by the legislative council. In appointing the five members 27 of each chamber to the committee, the council shall appoint 28 three members from the majority party and two members from the 29 minority party. 30 b. The legislative natural resources and outdoor recreation 31 trust fund review committee shall have the powers and duties 32 described in section 2.49. 33 c. This subsection is repealed December 31, 2050. 34 Sec. 60. NEW SECTION . 2.49 Legislative natural resources 35 -17- LSB 5731XL (18) 88 jm/jh 17/ 46

S.F. _____ H.F. _____ and outdoor recreation trust fund review committee. 1 1. The legislative natural resources and outdoor recreation 2 trust fund review committee shall meet during the legislative 3 interim in calendar years 2029, 2039, and 2049. The committee 4 shall consider the most effective ways to manage trust fund 5 moneys to further the purpose of Article VII, section 10, of 6 the Constitution of the State of Iowa. As part of its duties, 7 the committee may consider any of the following: 8 a. The administration of the trust fund, trust accounts, and 9 designated funds as provided in chapter 461. 10 b. The effectiveness of initiatives supported by trust fund 11 moneys as provided in chapter 461. 12 2. The committee shall report to the legislative council 13 the results of its considerations, which may include 14 recommendations and proposed legislation for consideration 15 during the next session of the general assembly. 16 3. This section is repealed December 31, 2050. 17 Sec. 61. Section 8.57, subsection 5, paragraph f, 18 subparagraph (1), subparagraph division (c), Code 2020, is 19 amended by striking the subparagraph division. 20 Sec. 62. Section 8.57, subsection 5, paragraph f, 21 subparagraph (1), subparagraph division (f), Code 2020, is 22 amended to read as follows: 23 (f) For the fiscal year beginning July 1, 2018, and for 24 each fiscal year thereafter, the total moneys in excess of the 25 moneys deposited under this paragraph “f” in the revenue bonds 26 debt service fund, the revenue bonds federal subsidy holdback 27 fund, the vision Iowa fund, the water quality infrastructure 28 fund, the Iowa skilled worker and job creation fund, and the 29 general fund of the state shall be deposited in the rebuild 30 Iowa infrastructure fund and shall be used as provided in this 31 section , notwithstanding section 8.60 . 32 Sec. 63. Section 8.57B, subsection 1, Code 2020, is amended 33 to read as follows: 34 1. a. A water quality infrastructure fund is created within 35 -18- LSB 5731XL (18) 88 jm/jh 18/ 46