Senate
Study
Bill
3152
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
DAWSON)
A
BILL
FOR
An
Act
relating
to
aircraft,
including
special
certificates
1
issued
to
aircraft
manufacturers,
transporters,
and
dealers,
2
and
sales
and
use
tax
exemptions
associated
with
aircraft,
3
providing
fees,
making
penalties
applicable,
and
including
4
effective
date
and
applicability
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
TLSB
5658XC
(2)
89
th/ns
S.F.
_____
DIVISION
I
1
SPECIAL
CERTIFICATES
2
Section
1.
Section
328.28,
subsection
1,
Code
2022,
is
3
amended
to
read
as
follows:
4
1.
A
manufacturer
or
dealer
owning
an
aircraft
otherwise
5
required
to
be
registered
under
this
chapter
may
operate
the
6
aircraft
for
up
to
three
years
for
purposes
of
transporting,
7
testing,
demonstrating,
or
selling
the
aircraft
without
8
registering
the
aircraft,
upon
condition
that
a
special
9
certificate
be
obtained
by
the
owner
for
each
year
the
owner
10
operates
the
aircraft
as
provided
in
this
section
and
sections
11
328.29
through
328.33
.
12
Sec.
2.
Section
328.29,
Code
2022,
is
amended
to
read
as
13
follows:
14
328.29
Application
for
special
certificate
——
fee.
15
A
manufacturer,
transporter,
or
dealer
may,
upon
payment
16
of
a
one
four
hundred
dollar
fee,
make
application
to
the
17
department
upon
such
forms
as
the
department
may
prescribe
18
for
a
special
certificate.
The
applicant
shall
also
submit
19
such
reasonable
proof
of
the
applicant’s
status
as
a
bona
fide
20
manufacturer,
transporter,
or
dealer
as
the
department
may
21
require.
Dealers
in
new
aircraft
shall
furnish
satisfactory
22
evidence
of
a
valid
franchise
with
the
manufacturer
or
23
distributor
of
such
aircraft
authorizing
such
dealership.
24
Sec.
3.
Section
328.32,
Code
2022,
is
amended
to
read
as
25
follows:
26
328.32
Expiration
of
special
certificate.
27
A
special
certificate
expires
at
midnight
on
June
30
October
28
31
,
and
a
new
special
certificate
for
the
ensuing
year
may
be
29
obtained
by
the
person
to
whom
the
expired
special
certificate
30
was
issued,
upon
application
to
the
department
and
payment
of
31
the
fee
provided
in
section
328.29
.
32
Sec.
4.
Section
328.34,
Code
2022,
is
amended
by
adding
the
33
following
new
subsection:
34
NEW
SUBSECTION
.
7.
That
the
person
making
application
for,
35
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_____
or
holding,
a
special
certificate
operated
an
aircraft
for
1
purposes
of
transporting,
testing,
demonstrating,
or
selling
2
the
aircraft,
without
registering
the
aircraft,
after
three
3
years
of
holding
a
special
certificate
for
the
aircraft
in
4
violation
of
section
328.28.
5
Sec.
5.
Section
328.36,
subsection
1,
Code
2022,
is
amended
6
to
read
as
follows:
7
1.
All
moneys
received
by
the
department
pursuant
to
section
8
sections
328.21
and
328.29
shall
be
deposited
into
the
state
9
aviation
fund
created
in
section
328.56
.
10
Sec.
6.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
11
effect
June
30,
2022.
12
Sec.
7.
APPLICABILITY.
This
division
of
this
Act
applies
to
13
special
certificates
issued
by
the
department
of
transportation
14
that
are
valid
for
a
period
beginning
after
midnight
on
June
15
30,
2022.
Special
certificates
issued
by
the
department
of
16
transportation
that
are
valid
for
a
period
beginning
after
17
midnight
on
June
30,
2022,
but
beginning
before
midnight
on
18
October
31,
2022,
shall
expire
at
midnight
on
October
31,
19
2023,
and
the
validity
period
for
such
special
certificates
20
shall
count
as
only
one
year
for
purposes
of
section
328.28,
21
subsection
1,
as
amended
in
this
division
of
this
Act,
and
22
section
328.34,
subsection
7,
as
enacted
in
this
division
of
23
this
Act.
24
DIVISION
II
25
SALES
AND
USE
TAX
EXEMPTIONS
26
Sec.
8.
Section
423.3,
subsections
74
and
76,
Code
2022,
are
27
amended
to
read
as
follows:
28
74.
The
sales
price
from
the
sale
or
rental
of
aircraft
for
29
use
in
a
scheduled
interstate
federal
aviation
administration
30
certificated
air
carrier
operation.
31
76.
The
sales
price
from
the
sale
or
rental
of
tangible
32
personal
property
permanently
affixed
or
attached
as
a
33
component
part
of
the
aircraft,
including
but
not
limited
34
to
repair
or
replacement
materials
or
parts;
and
the
sales
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price
of
all
services
used
for
aircraft
repair,
remodeling,
1
and
maintenance
services
when
such
services
are
performed
on
2
aircraft,
aircraft
engines,
or
aircraft
component
materials
or
3
parts.
For
the
purposes
of
this
exemption,
“aircraft”
means
4
aircraft
used
in
nonscheduled
interstate
federal
aviation
5
administration
certificated
air
carrier
operation
operating
6
under
14
C.F.R.
ch.
1,
pt.
135
the
same
as
defined
in
section
7
328.1
.
8
Sec.
9.
Section
423.3,
subsection
75,
Code
2022,
is
amended
9
by
striking
the
subsection.
10
EXPLANATION
11
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
12
the
explanation’s
substance
by
the
members
of
the
general
assembly.
13
SPECIAL
CERTIFICATES.
Under
current
law,
an
aircraft
14
manufacturer
or
dealer
may
operate
an
aircraft
for
purposes
of
15
transporting,
testing,
demonstrating,
or
selling
the
aircraft
16
without
registering
the
aircraft
by
obtaining
a
special
17
certificate
from
the
department
of
transportation
(DOT).
This
18
bill
limits
the
period
a
manufacturer
or
dealer
may
operate
19
the
aircraft
under
a
special
certificate
to
three
years.
The
20
bill
increases
the
annual
fee
for
a
special
certificate
from
21
$100
to
$400,
and
provides
that
a
special
certificate
expires
22
at
midnight
on
October
31
rather
than
midnight
on
June
30.
23
The
bill
provides
that
the
DOT
may
refuse
to
issue,
or
may
24
revoke
or
suspend,
a
special
certificate
if
the
person
making
25
application
for,
or
holding,
the
special
certificate
operated
26
such
an
aircraft
after
three
years
of
holding
a
special
27
certificate
for
the
aircraft
in
violation
of
the
bill.
28
Under
current
law,
aircraft
registration
fees
collected
29
under
Code
section
328.21
are
required
to
be
deposited
in
the
30
state
aviation
fund.
The
bill
specifies
that
fees
received
by
31
the
DOT
for
the
issuance
of
special
certificates
must
also
be
32
deposited
in
the
state
aviation
fund,
in
accordance
with
the
33
current
practice.
34
These
provisions
take
effect
June
30,
2022,
and
apply
to
35
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_____
special
certificates
issued
by
the
DOT
that
are
valid
for
a
1
period
beginning
after
midnight
on
June
30,
2022.
The
bill
2
provides
that
special
certificates
issued
by
the
DOT
that
are
3
valid
for
a
period
beginning
after
midnight
on
June
30,
2022,
4
but
beginning
before
midnight
on
October
31,
2022,
shall
expire
5
at
midnight
on
October
31,
2023,
and
the
validity
period
for
6
such
special
certificates
shall
count
as
only
one
year
for
7
purposes
of
the
bill.
8
Under
current
law,
Code
section
328.40
provides
that
any
9
person
who
violates
any
of
the
provisions
of
Code
chapter
10
328
shall
be
guilty
of
a
fraudulent
practice.
A
fraudulent
11
practice
is
punishable
by
criminal
penalties
under
Code
12
sections
714.9
through
714.13.
13
SALES
AND
USE
TAX
EXEMPTIONS.
Under
current
law,
Code
14
section
423.3
exempts
from
the
Iowa
sales
and
use
tax,
among
15
other
things,
the
sale,
rental,
or
use
of
aircraft
component
16
parts
permanently
attached
to
an
aircraft,
including
repair
or
17
replacement
materials
or
parts,
and
repair,
remodeling,
and
18
maintenance
services
used
on
an
aircraft,
aircraft
engine,
or
19
aircraft
component
materials
or
parts,
provided
the
aircraft
is
20
used
in
either
a
scheduled
or
nonscheduled
interstate
federal
21
aviation
administration
(FAA)
certified
air
carrier
operation
22
(scheduled
or
nonscheduled
FAA
operation).
The
bill
removes
23
the
requirement
that
the
aircraft
be
used
in
a
scheduled
or
24
nonscheduled
FAA
operation
to
qualify
for
the
exemption.
The
25
sale,
rental,
or
use
of
the
component
parts
and
services
26
described
above
will
be
exempt
from
the
sales
and
use
tax
27
when
permanently
attached
to
or
performed
on
any
aircraft.
28
The
bill
defines
“aircraft”
to
mean
the
same
as
it
does
for
29
purposes
of
Code
chapter
328
(aeronautics),
which
includes
any
30
contrivance
now
known,
or
hereafter
invented,
used
or
designed
31
for
navigation
of
or
flight
in
the
air,
for
the
purpose
of
32
transporting
persons
or
property,
or
both.
33
The
bill
also
makes
nonsubstantive
changes
to
Code
sections
34
423.3(74)
and
423.3(75)
to
strike
or
move
similar
language
35
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relating
to
the
sales
and
use
tax
exemption
described
in
the
1
bill
and
to
the
sales
and
use
tax
exemption
for
the
sale
or
2
rental
of
aircraft
used
in
a
scheduled
FAA
operation.
3
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5658XC
(2)
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th/ns
5/
5