Senate Study Bill 3157 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON) A BILL FOR An Act relating to state and local revenue and finances by 1 modifying sales and use taxes, the charitable conservation 2 contribution tax credit available against individual and 3 corporate income taxes, the automobile rental excise tax, 4 the water service tax, and local option taxes, crediting 5 moneys to the natural resources and outdoor recreation trust 6 fund, making appropriations, and including effective date 7 and applicability provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 6242XC (6) 89 md/jh
S.F. _____ DIVISION I 1 SALES AND USE TAX RATES AND DISTRIBUTION 2 Section 1. Section 423.2, subsection 1, unnumbered 3 paragraph 1, Code 2022, is amended to read as follows: 4 There is imposed a tax of six percent at the rate specified 5 in subsection 12 upon the sales price of all sales of tangible 6 personal property, sold at retail in the state to consumers or 7 users except as otherwise provided in this subchapter . 8 Sec. 2. Section 423.2, subsections 2 and 3, Code 2022, are 9 amended to read as follows: 10 2. A tax of six percent at the rate specified in subsection 11 12 is imposed upon the sales price of the sale or furnishing 12 of gas, electricity, water, heat, pay television service, and 13 communication service, including the sales price from such 14 sales by any municipal corporation or joint water utility 15 furnishing gas, electricity, water, heat, pay television 16 service, and communication service to the public in its 17 proprietary capacity, except as otherwise provided in this 18 subchapter , when sold at retail in the state to consumers or 19 users. 20 3. A tax of six percent at the rate specified in subsection 21 12 is imposed upon the sales price of all sales of tickets 22 or admissions to places of amusement, fairs, and athletic 23 events except those of elementary and secondary educational 24 institutions. A tax of six percent at the rate specified in 25 subsection 12 is imposed on the sales price of an entry fee or 26 like charge imposed solely for the privilege of participating 27 in an activity at a place of amusement, fair, or athletic event 28 unless the sales price of tickets or admissions charges for 29 observing the same activity are taxable under this subchapter . 30 A tax of six percent at the rate specified in subsection 12 31 is imposed upon that part of private club membership fees or 32 charges paid for the privilege of participating in any athletic 33 sports provided club members. 34 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2022, 35 -1- LSB 6242XC (6) 89 md/jh 1/ 51
S.F. _____ is amended to read as follows: 1 a. A tax of six percent at the rate specified in subsection 2 12 is imposed upon the sales price derived from the operation 3 of all forms of amusement devices and games of skill, games of 4 chance, raffles, and bingo games as defined in chapter 99B , and 5 card game tournaments conducted under section 99B.27 , that are 6 operated or conducted within the state, the tax to be collected 7 from the operator in the same manner as for the collection of 8 taxes upon the sales price of tickets or admission as provided 9 in this section . Nothing in this subsection shall legalize any 10 games of skill or chance or slot-operated devices which are now 11 prohibited by law. 12 Sec. 4. Section 423.2, subsection 5, Code 2022, is amended 13 to read as follows: 14 5. There is imposed a tax of six percent at the rate 15 specified in subsection 12 upon the sales price from the 16 furnishing of services as defined in section 423.1 . 17 Sec. 5. Section 423.2, subsection 7, paragraph a, 18 unnumbered paragraph 1, Code 2022, is amended to read as 19 follows: 20 A tax of six percent at the rate specified in subsection 12 21 is imposed upon the sales price from the sales, furnishing, or 22 service of solid waste collection and disposal service. 23 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2022, 24 is amended to read as follows: 25 a. A tax of six percent at the rate specified in subsection 26 12 is imposed on the sales price from sales of bundled 27 transactions. For the purposes of this subsection , a “bundled 28 transaction” is the retail sale of two or more distinct and 29 identifiable products, except real property and services to 30 real property, which are sold for one nonitemized price. A 31 “bundled transaction” does not include the sale of any products 32 in which the sales price varies, or is negotiable, based on 33 the selection by the purchaser of the products included in the 34 transaction. 35 -2- LSB 6242XC (6) 89 md/jh 2/ 51
S.F. _____ Sec. 7. Section 423.2, subsection 9, Code 2022, is amended 1 to read as follows: 2 9. A tax of six percent at the rate specified in 3 subsection 12 is imposed upon the sales price from any mobile 4 telecommunications service, including all paging services, 5 that this state is allowed to tax pursuant to the provisions 6 of the federal Mobile Telecommunications Sourcing Act, Pub. 7 L. No. 106-252, 4 U.S.C. §116 et seq. For purposes of this 8 subsection , taxes on mobile telecommunications service, as 9 defined under the federal Mobile Telecommunications Sourcing 10 Act that are deemed to be provided by the customer’s home 11 service provider, shall be paid to the taxing jurisdiction 12 whose territorial limits encompass the customer’s place of 13 primary use, regardless of where the mobile telecommunications 14 service originates, terminates, or passes through and 15 shall in all other respects be taxed in conformity with 16 the federal Mobile Telecommunications Sourcing Act. All 17 other provisions of the federal Mobile Telecommunications 18 Sourcing Act are adopted by the state of Iowa and incorporated 19 into this subsection by reference. With respect to mobile 20 telecommunications service under the federal Mobile 21 Telecommunications Sourcing Act, the director shall, if 22 requested, enter into agreements consistent with the provisions 23 of the federal Act. 24 Sec. 8. Section 423.2, subsection 10, paragraph a, Code 25 2022, is amended to read as follows: 26 a. A tax of six percent at the rate specified in subsection 27 12 is imposed on the sales price of specified digital products 28 sold at retail in the state. The tax applies whether the 29 purchaser obtains permanent use or less than permanent use of 30 the specified digital product, whether the sale is conditioned 31 or not conditioned upon continued payment from the purchaser, 32 and whether the sale is on a subscription basis or is not on a 33 subscription basis. 34 Sec. 9. Section 423.2, subsection 12, Code 2022, is amended 35 -3- LSB 6242XC (6) 89 md/jh 3/ 51
S.F. _____ by striking the subsection and inserting in lieu thereof the 1 following: 2 12. a. For the period beginning January 1, 2023, through 3 December 31, 2050, the sales tax rate is seven percent. 4 b. Beginning January 1, 2051, the sales tax rate is six 5 percent. 6 Sec. 10. Section 423.2A, subsection 2, paragraphs a, b, and 7 c, Code 2022, are amended to read as follows: 8 a. (1) Transfer For the period beginning January 1, 2023, 9 through December 31, 2050, transfer one-seventh of the revenues 10 collected under deposited into the general fund of the state 11 under subsection 1 to the appropriate county accounts under 12 chapter 423B for the counties from which the tax was collected . 13 (2) Beginning January 1, 2051, transfer one-sixth of the 14 revenues deposited into the general fund of the state under 15 subsection 1 to the appropriate county accounts under chapter 16 423B for the counties from which the tax was collected. 17 b. Transfer from the remaining revenues the amounts required 18 under Article VII, section 10, of the Constitution of the State 19 of Iowa to the natural resources and outdoor recreation trust 20 fund created in section 461.31 , if applicable . 21 c. Transfer one-sixth of from the remaining revenues an 22 amount equal to one-seventh of the revenues deposited into the 23 general fund of the state under subsection 1 to the secure an 24 advanced vision for education fund created in section 423F.2 . 25 This paragraph “c” is repealed January 1, 2051. 26 Sec. 11. Section 423.5, subsection 1, unnumbered paragraph 27 1, Code 2022, is amended to read as follows: 28 Except as provided in paragraph “b” , an excise tax at the 29 rate of six percent specified in subsection 4 of the purchase 30 price or installed purchase price is imposed on the following: 31 Sec. 12. Section 423.5, subsection 4, Code 2022, is amended 32 by striking the subsection and inserting in lieu thereof the 33 following: 34 4. a. For the period beginning January 1, 2023, through 35 -4- LSB 6242XC (6) 89 md/jh 4/ 51
S.F. _____ December 31, 2050, the use tax rate is seven percent. 1 b. Beginning January 1, 2051, the use tax rate is six 2 percent. 3 Sec. 13. Section 423.43, subsection 1, paragraph b, Code 4 2022, is amended by striking the paragraph and inserting in 5 lieu thereof the following: 6 b. Subsequent to the deposit into the general fund of 7 the state the department shall do the following in the order 8 prescribed: 9 (1) (a) For the period beginning January 1, 2023, through 10 December 31, 2042, transfer one-seventh of such revenues to the 11 local use tax supplement fund. 12 (b) For the period beginning January 1, 2043, through 13 December 31, 2050, transfer one-seventh of such revenues to the 14 appropriate county accounts under chapter 423B for the counties 15 from which the tax was paid. 16 (c) Beginning January 1, 2051, transfer one-sixth of such 17 revenues to the appropriate county accounts under chapter 423B 18 for the counties from which the tax was paid. 19 (2) Transfer one-sixth of such remaining revenues to the 20 secure an advanced vision for education fund created in section 21 423F.2. This subparagraph is repealed January 1, 2051. 22 Sec. 14. EFFECTIVE DATE. This division of this Act takes 23 effect January 1, 2023. 24 DIVISION II 25 AUTOMOBILE RENTAL EXCISE TAX 26 Sec. 15. Section 423C.3, subsection 1, Code 2022, is amended 27 to read as follows: 28 1. A tax of five seven percent is imposed upon the rental 29 price of an automobile if the rental transaction is subject 30 to the sales tax under chapter 423, subchapter II , or the use 31 tax under chapter 423, subchapter III . The tax shall not be 32 imposed on any rental transaction not taxable under the state 33 sales tax, as provided in section 423.3 , or the state use tax, 34 as provided in section 423.6 , on automobile rental receipts. 35 -5- LSB 6242XC (6) 89 md/jh 5/ 51
S.F. _____ Sec. 16. EFFECTIVE DATE. This division of this Act takes 1 effect January 1, 2023. 2 DIVISION III 3 WATER SERVICE TAX 4 Sec. 17. Section 423G.3, Code 2022, is amended to read as 5 follows: 6 423G.3 Water service tax. 7 An excise tax at the rate of six seven percent is imposed on 8 the sales price from the sale or furnishing by a water utility 9 of a water service in the state to consumers or users. 10 Sec. 18. Section 423G.6, subsection 2, Code 2022, is amended 11 by striking the subsection. 12 Sec. 19. REPEAL. Chapter 423G.7, Code 2022, is repealed. 13 Sec. 20. EFFECTIVE DATE. This division of this Act takes 14 effect January 1, 2023. 15 DIVISION IV 16 CHARITABLE CONSERVATION CONTRIBUTION TAX CREDIT 17 Sec. 21. Section 2.48, subsection 3, paragraph e, 18 subparagraph (6), Code 2022, is amended by striking the 19 subparagraph. 20 Sec. 22. Section 422.11W, Code 2022, is amended by adding 21 the following new subsection: 22 NEW SUBSECTION . 5. Commencing with tax years beginning 23 on or after January 1, 2023, a charitable conservation 24 contribution tax credit shall not be claimed against taxes as 25 provided in this section, except for tax credits claimed for 26 qualified real property interests conveyed prior to January 1, 27 2023. 28 Sec. 23. Section 422.33, subsection 25, Code 2022, is 29 amended by striking the subsection and inserting in lieu 30 thereof the following: 31 25. The taxes imposed under this subchapter shall be reduced 32 by a charitable conservation contribution tax credit as allowed 33 under section 422.11W for each tax year the taxpayer has 34 credit, in excess of tax liability, for qualified real property 35 -6- LSB 6242XC (6) 89 md/jh 6/ 51
S.F. _____ interests conveyed prior to January 1, 2023. 1 Sec. 24. PRESERVATION OF EXISTING RIGHTS. This division 2 of this Act is not intended to and shall not limit, modify, or 3 otherwise adversely affect any amount of tax credit issued, 4 awarded, or allowed prior to January 1, 2023, nor shall it 5 limit, modify, or otherwise adversely affect a taxpayer’s right 6 to claim or redeem a tax credit issued, awarded, or allowed 7 prior to January 1, 2023, including but not limited to any tax 8 credit carryforward amount. 9 Sec. 25. EFFECTIVE DATE. This division of this Act takes 10 effect January 1, 2023. 11 Sec. 26. APPLICABILITY. This division of this Act applies 12 to tax years beginning on or after January 1, 2023. 13 DIVISION V 14 LOCAL OPTION TAXES 15 Sec. 27. Section 15J.7, subsection 2, Code 2022, is amended 16 to read as follows: 17 2. In addition to the moneys received pursuant to section 18 15J.6 , a municipality may deposit in the reinvestment project 19 fund any other moneys lawfully at the municipality’s disposal, 20 including but not limited to local sales and services tax 21 receipts collected revenues received under chapter 423B if such 22 use is a purpose authorized for the municipality under chapter 23 423B . 24 Sec. 28. Section 28A.17, Code 2022, is amended to read as 25 follows: 26 28A.17 Local sales and services tax. 27 1. If an authority is established as provided in section 28 28A.6 and after approval of a referendum by a simple majority 29 of votes cast in each metropolitan area in favor of the sales 30 and services tax, the governing board of a county in this state 31 within a metropolitan area which is part of the authority shall 32 impose, at the request of the authority, a local sales and 33 services tax at the rate of one-fourth of one percent on the 34 sales price taxed by this state under section 423.2 , within 35 -7- LSB 6242XC (6) 89 md/jh 7/ 51
S.F. _____ the metropolitan area located in this state. The referendum 1 shall be called by resolution of the board and shall be held 2 as provided in section 28A.6 to the extent applicable. The 3 ballot proposition shall contain a statement as to the specific 4 purpose or purposes for which the revenues shall be expended 5 and the date of expiration of the tax. The local sales and 6 services tax shall be imposed on the same basis, with the same 7 exceptions, and following the same administrative procedures as 8 provided for a county under sections 423B.5 and 423B.6 , Code 9 2022 . The amount of the sale, for the purposes of determining 10 the amount of the local sales and services tax under this 11 section , does not include the amount of any local sales and 12 services tax imposed under sections 423B.5 and 423B.6 , Code 13 2022 . 14 2. The treasurer of state shall credit the local sales 15 and services tax receipts and interest and penalties to the 16 authority’s account. Moneys in this account shall be remitted 17 quarterly to the authority. The proceeds of the tax imposed 18 under this section shall be used only for the construction, 19 reconstruction, or repair of metropolitan facilities as 20 specified in the referendum. The local sales and services tax 21 imposed under this section may be suspended for not less than 22 a fiscal quarter or more than one year by action of the board. 23 The suspension may be renewed or continued by the board, but 24 the board shall act on the suspension at least annually. 25 The local sales and services tax may also be repealed by a 26 petition and favorable referendum following the procedures and 27 requirements of sections 28A.5 and 28A.6 as applicable. The 28 board shall give the department of revenue at least forty days’ 29 notice of the repeal, suspension, or reinstatement of the tax 30 and the effective dates for imposition, suspension, or repeal 31 of the tax shall be as provided in section 423B.6 , Code 2022 . 32 3. A local sales and services tax authorized under this 33 section shall not be imposed or collected on or after January 34 1, 2023. 35 -8- LSB 6242XC (6) 89 md/jh 8/ 51
S.F. _____ Sec. 29. Section 76.4, Code 2022, is amended to read as 1 follows: 2 76.4 Permissive application of funds. 3 Whenever the governing authority of such political 4 subdivision shall have on hand funds derived from any other 5 source than taxation which may be appropriated to the payment 6 either of interest or principal, or both principal and interest 7 of such bonds, such funds may be so appropriated and used 8 and the levy for the payment of the bonds correspondingly 9 reduced. This section shall not restrict the authority of a 10 political subdivision to apply sales and services tax receipts 11 collected received pursuant to chapter 423B for such purpose. 12 Notwithstanding section 423F.3 , a school district may apply tax 13 receipts received pursuant to chapter 423F for the purposes of 14 this section . 15 Sec. 30. Section 99B.1, subsection 23, Code 2022, is amended 16 to read as follows: 17 23. “Net receipts” means gross receipts less amounts awarded 18 as prizes and less state and local sales tax paid upon the 19 gross receipts. 20 Sec. 31. Section 99B.14, subsection 1, Code 2022, is amended 21 to read as follows: 22 1. A licensed qualified organization shall certify 23 that the receipts from all charitable gambling conducted 24 by the organization under this chapter , less reasonable 25 expenses, charges, fees, taxes, and deductions, either will 26 be distributed as prizes to participants or will be dedicated 27 and distributed for educational, civic, public, charitable, 28 patriotic, or religious uses. Reasonable expenses, charges, 29 fees, taxes other than the state and local sales tax, and 30 deductions allowed by the department shall not exceed forty 31 percent of net receipts. 32 Sec. 32. Section 99G.4, subsection 2, Code 2022, is amended 33 to read as follows: 34 2. The income and property of the authority shall be exempt 35 -9- LSB 6242XC (6) 89 md/jh 9/ 51
S.F. _____ from all state and local taxes, and the sale of lottery tickets 1 and shares issued and sold by the authority and its retail 2 licensees shall be exempt from all state and local sales taxes. 3 Sec. 33. Section 99G.30A, subsection 2, paragraph a, Code 4 2022, is amended to read as follows: 5 a. The director of revenue shall administer the monitor 6 vending machine excise tax as nearly as possible in conjunction 7 with the administration of state sales tax laws. The director 8 shall provide appropriate forms or provide appropriate entries 9 on the regular state tax forms for reporting local sales and 10 services tax liability. 11 Sec. 34. Section 279.63, subsection 2, paragraph a, Code 12 2022, is amended to read as follows: 13 a. All property tax levies , and income surtaxes , and local 14 option sales taxes in place in the school district, listed by 15 type of levy, rate, amount, duration, and notification of the 16 maximum rate and amount limitations permitted by statute. 17 Sec. 35. Section 321.40, subsection 5, Code 2022, is amended 18 by striking the subsection. 19 Sec. 36. Section 321.130, Code 2022, is amended to read as 20 follows: 21 321.130 Fees in lieu of taxes. 22 The registration fees imposed by this chapter upon private 23 passenger motor vehicles or semitrailers are in lieu of all 24 state and local taxes , except local vehicle taxes, to which 25 motor vehicles or semitrailers are subject. 26 Sec. 37. Section 418.13, subsection 2, Code 2022, is amended 27 to read as follows: 28 2. In addition to the moneys received pursuant to section 29 418.10 or 418.12 , a governmental entity may deposit in the 30 flood project fund any other moneys lawfully received by the 31 governmental entity, including but not limited to local sales 32 and services tax receipts collected amounts received under 33 chapter 423B . 34 Sec. 38. Section 421.26, Code 2022, is amended to read as 35 -10- LSB 6242XC (6) 89 md/jh 10/ 51
S.F. _____ follows: 1 421.26 Personal liability for tax due. 2 If a licensee or other person under section 452A.65 , a 3 retailer or purchaser under chapter 423A , 423B , 423C , 423D , 4 or 423E , or section 423.14 , 423.14A , 423.29 , 423.31 , 423.32 , 5 or 423.33 , or a user under section 423.34 , or a permit holder 6 or licensee under section 453A.13 , 453A.16 , or 453A.44 fails 7 to pay a tax under those sections when due, an officer of a 8 corporation or association, notwithstanding section 489.304 , 9 a member or manager of a limited liability company, or a 10 partner of a partnership, having control or supervision of 11 or the authority for remitting the tax payments and having 12 a substantial legal or equitable interest in the ownership 13 of the corporation, association, limited liability company, 14 or partnership, who has intentionally failed to pay the tax 15 is personally liable for the payment of the tax, interest, 16 and penalty due and unpaid. However, this section shall 17 not apply to taxes on accounts receivable. The dissolution 18 of a corporation, association, limited liability company, 19 or partnership shall not discharge a person’s liability for 20 failure to remit the tax due. 21 Sec. 39. Section 421.28, Code 2022, is amended to read as 22 follows: 23 421.28 Exceptions to successor liability. 24 The immediate successor to a licensee’s or retailer’s 25 business or stock of goods under chapter 423A or 423B , or 26 section 423.33 or 452A.65 , is not personally liable for 27 the amount of delinquent tax, interest, or penalty due and 28 unpaid if the immediate successor shows that the purchase of 29 the business or stock of goods was made in good faith that 30 no delinquent tax, interest, or penalty was due and unpaid. 31 For purposes of this section the immediate successor shows 32 good faith by evidence that the department had provided 33 the immediate successor with a certified statement that 34 no delinquent tax, interest, or penalty is unpaid, or that 35 -11- LSB 6242XC (6) 89 md/jh 11/ 51
S.F. _____ the immediate successor had taken in good faith a certified 1 statement from the licensee, retailer, or seller that no 2 delinquent tax, interest, or penalty is unpaid. When requested 3 to do so by a person with whom the licensee or retailer is 4 negotiating the sale of the business or stock of goods, the 5 director of revenue shall, upon being satisfied that such 6 a situation exists, inform that person as to the amount of 7 unpaid delinquent tax, interest, or penalty due by the licensee 8 or the retailer. The giving of the information under this 9 circumstance is not a violation of section 422.20 , 422.72 , or 10 452A.63 . 11 Sec. 40. Section 421.60, subsection 2, paragraph m, 12 subparagraphs (1) and (2), Code 2022, are amended to read as 13 follows: 14 (1) The director may abate unpaid state sales and use 15 taxes and local sales and services taxes owed by a retailer 16 in the event that the retailer failed to collect tax from the 17 purchaser as a result of erroneous written advice issued by 18 the department that was specially directed to the retailer 19 by the department and the retailer is unable to collect the 20 tax, interest, or penalties from the purchaser. Before the 21 tax, interest, and penalties shall be abated on the basis of 22 erroneous written advice, the retailer must present a copy of 23 the retailer’s request for written advice to the department and 24 a copy of the department’s reply. The department shall not 25 maintain a position against the retailer that is inconsistent 26 with the erroneous written advice, except on the basis of 27 subsequent written advice sent by the department to that 28 retailer, or a change in state or federal law, a reported 29 court case to the contrary, a contrary rule adopted by the 30 department, a change in material facts or circumstances 31 relating to the retailer, or the retailer’s misrepresentation 32 or incomplete or inadequate representation of material facts 33 and circumstances in requesting the written advice. 34 (2) (a) The director shall abate the unpaid state sales 35 -12- LSB 6242XC (6) 89 md/jh 12/ 51
S.F. _____ and use taxes and any local sales and services taxes owed by a 1 retailer where the retailer failed to collect the tax from the 2 purchaser on the charges paid for access to on-line computer 3 services as a result of erroneous written advice issued by the 4 department regarding the taxability of charges paid for access 5 to on-line computer services. To qualify for the abatement 6 under this subparagraph, the erroneous written advice shall 7 have been issued by the department prior to July 1, 1999, and 8 shall have been specially directed to the retailer by the 9 department. 10 (b) If an abatement of unpaid state sales and use taxes and 11 any local sales and services taxes is granted to the retailer 12 by the director pursuant to this subparagraph, the department 13 is precluded from collecting from the purchaser any unpaid 14 state sales and use taxes and any local sales and services 15 taxes which were abated. 16 Sec. 41. Section 422.72, subsection 6, paragraph a, Code 17 2022, is amended to read as follows: 18 a. The department may enter into a written informational 19 exchange agreement for tax administration purposes with a city 20 or county which is entitled to receive funds due to a local 21 hotel and motel tax or a local sales and services tax . The 22 written informational exchange agreement shall designate no 23 more than two paid city or county employees that have access to 24 actual return information relating to that city’s or county’s 25 receipts from a local hotel and motel tax or a local sales and 26 services tax . 27 Sec. 42. Section 423.4, subsection 2, paragraph d, Code 28 2022, is amended by striking the paragraph. 29 Sec. 43. Section 423.4, subsection 5, paragraph f, Code 30 2022, is amended to read as follows: 31 f. Notwithstanding the state sales tax imposed in section 32 423.2 , a rebate issued pursuant to this subsection shall not 33 exceed an amount equal to five percent of the sales price 34 of the tangible personal property or services furnished to 35 -13- LSB 6242XC (6) 89 md/jh 13/ 51
S.F. _____ purchasers at the automobile racetrack facility. Any local 1 option taxes paid and collected shall not be subject to rebate 2 under this subsection . 3 Sec. 44. Section 423.4, subsection 7, paragraph f, Code 4 2022, is amended to read as follows: 5 f. The refund in this subsection applies only to state 6 sales and use tax paid and does not apply to local option 7 sales and services taxes imposed pursuant to chapter 423B . 8 Notwithstanding the state sales tax imposed in section 423.2 , 9 a refund issued pursuant to this section shall not exceed 10 an amount equal to five percent of the sales price of the 11 fuel used to create heat, power, and steam for processing 12 or generating electrical current or from the sale price 13 of electricity consumed by computers, machinery, or other 14 equipment for operation of the data center business facility. 15 Sec. 45. Section 423.4, subsection 8, paragraph g, Code 16 2022, is amended to read as follows: 17 g. The refund in this subsection applies only to state 18 sales and use tax paid and does not apply to local option 19 sales and services taxes imposed pursuant to chapter 423B . 20 Notwithstanding the state sales tax imposed in section 423.2 , 21 a refund issued pursuant to this section shall not exceed an 22 amount equal to five percent of the sales price of the items 23 listed in paragraph “a” , subparagraphs (1), (2), and (3). 24 Sec. 46. Section 423.14A, subsection 2, Code 2022, is 25 amended to read as follows: 26 2. In addition to and not in lieu of any application of 27 this chapter to sellers who are retailers and sellers who are 28 retailers maintaining a place of business in this state, any 29 person described in subsection 3 , or the person’s agents, 30 shall be considered a retailer in this state and a retailer 31 maintaining a place of business in this state for purposes of 32 this chapter on or after January 1, 2019, and shall be subject 33 to all requirements of this chapter imposed on retailers and 34 retailers maintaining a place of business in this state, 35 -14- LSB 6242XC (6) 89 md/jh 14/ 51
S.F. _____ including but not limited to the requirement to collect and 1 remit sales and use taxes pursuant to sections 423.14 and 2 423.29 , and local option taxes under chapter 423B . 3 Sec. 47. Section 423.33, subsection 1, paragraph c, Code 4 2022, is amended to read as follows: 5 c. If the retailer fails to collect sales tax at the time 6 of the transaction, the retailer shall thereafter remit the 7 applicable sales tax, or the purchaser thereafter shall remit 8 the applicable use tax. If the purchaser remits all applicable 9 use tax, the retailer remains liable for any local sales and 10 services tax under chapter 423B that the retailer failed to 11 collect. 12 Sec. 48. Section 423.34A, unnumbered paragraph 1, Code 13 2022, is amended to read as follows: 14 A purchaser is relieved of liability for payment of state 15 sales or use tax, for payment of any local option sales tax, 16 for payment of interest, or for payment of any penalty for 17 nonpayment of tax which nonpayment is not fraudulent, willful, 18 or intentional, under the following circumstances: 19 Sec. 49. Section 423.36, subsection 9, paragraph a, Code 20 2022, is amended to read as follows: 21 a. Except as provided in paragraph “b” , purchasers, users, 22 and consumers of tangible personal property, specified digital 23 products, or enumerated services taxed pursuant to subchapter 24 II or III of this chapter or chapter 423B may be authorized, 25 pursuant to rules adopted by the director, to remit tax owed 26 directly to the department instead of the tax being collected 27 and paid by the seller. To qualify for a direct pay tax permit, 28 the purchaser, user, or consumer must accrue a tax liability 29 of more than four thousand dollars in tax under subchapters 30 II and III in a semimonthly period and make deposits and file 31 returns pursuant to section 423.31 . This authority shall not 32 be granted or exercised except upon application to the director 33 and then only after issuance by the director of a direct pay 34 tax permit. 35 -15- LSB 6242XC (6) 89 md/jh 15/ 51
S.F. _____ Sec. 50. Section 423B.1, Code 2022, is amended by striking 1 the section and inserting in lieu thereof the following: 2 423B.1 Use of revenues deposited in the local sales and use 3 tax fund —— revenue purpose statement. 4 1. a. Revenues credited to and deposited in each county’s 5 account within the local sales and use tax fund shall be 6 expended by each recipient county and city as required by the 7 revenue purpose statement, subject to the requirements of 8 section 423B.7, subsection 7, and approved under this section 9 for the city or for the county for the unincorporated areas of 10 the county, or as required by subsection 3. 11 b. A revenue purpose statement for the use of local option 12 sales and services tax revenue under this chapter approved at 13 election prior to January 1, 2023, and in effect on or set 14 to take effect on or after January 1, 2023, and the use of 15 revenues received under this chapter for purposes authorized 16 under section 423B.10 for ordinances in effect and approved 17 before January 1, 2023, shall continue in effect for revenues 18 received under this chapter until the expiration of the revenue 19 purpose statement or ordinance, if applicable, or until the 20 county board of supervisors or city council, as applicable, 21 adopts a new revenue purpose statement under subsection 2 or 22 repeals or amends the ordinance for the use of revenues under 23 section 423B.10. 24 2. The board of supervisors of each county and the city 25 council of each city may adopt by resolution a revenue purpose 26 statement for the expenditure of funds received under this 27 chapter. 28 3. Each city and county without a valid revenue purpose 29 statement shall expend the revenues received for the following 30 purposes in the order prescribed in this subsection, except 31 that the payment of bonds for which the revenues have been 32 pledged shall be paid first: 33 a. Reduction of the county’s basic levies under section 34 331.423 or reduction of the city general fund levy under 35 -16- LSB 6242XC (6) 89 md/jh 16/ 51
S.F. _____ section 384.1, as applicable. 1 b. Reduction of any debt service levy of the county or city, 2 as applicable. 3 c. Reduction of the city’s additional taxes levied under 4 section 384.12 or the county’s supplemental levies under 5 section 331.424, as applicable. 6 d. Reduction of any other property tax levy of the county 7 or city, as applicable. 8 Sec. 51. NEW SECTION . 423B.1A Local use tax supplement 9 fund. 10 1. A local use tax supplement fund is created in the state 11 treasury under the control of the department of revenue. The 12 fund shall consist of all moneys transferred under section 13 423.43, subsection 1, paragraph “b” , subparagraph (1), 14 subparagraph division (a), and moneys appropriated to the fund. 15 2. Moneys in the local use tax supplement fund are annually 16 appropriated to the department of revenue and shall be used for 17 supplement payments to cities and counties under this section. 18 3. For each year during the period beginning January 1, 19 2023, through December 31, 2042, each city or county for the 20 unincorporated portion of the county, shall receive a local 21 use tax supplement payment equal to the difference, but not 22 less than zero between the amount of revenue received by the 23 city or county under section 423B.7, Code 2022, for the period 24 beginning January 1, 2022, and ending December 31, 2022, minus 25 the amount that would have been received by that city or county 26 for that period if all cities and the county were eligible for 27 distributions of such revenues under section 423B.7, Code 2022. 28 If moneys in the fund are insufficient to pay all supplement 29 amounts for the year, the director of revenue shall prorate the 30 payment of the supplement payments and shall notify the cities 31 and counties of the pro rata percentage. 32 4. The supplement payment calculated under subsection 3 33 shall be paid to each city or county for the unincorporated 34 area of the county and shall be combined with and be used in the 35 -17- LSB 6242XC (6) 89 md/jh 17/ 51
S.F. _____ same manner and be subject to the same requirements as moneys 1 received by the city or county under section 423B.7 for that 2 year. 3 5. Notwithstanding section 12C.7, subsection 2, interest or 4 earnings on moneys deposited in the local use tax supplement 5 fund shall be credited to the local use tax supplement fund. 6 Notwithstanding section 8.33, moneys credited to the local use 7 tax supplement fund shall not revert at the close of a fiscal 8 year. 9 6. This section is repealed January 1, 2043. Moneys in the 10 fund upon the repeal of this section shall be transferred to 11 the appropriate county accounts under section 423B.7 for the 12 counties from which the tax was paid. 13 Sec. 52. Section 423B.7, subsection 1, Code 2022, is amended 14 to read as follows: 15 1. a. Except as provided in paragraphs paragraph “b” and 16 “c” , the director shall credit the local sales and services tax 17 receipts and interest and penalties from a county-imposed tax 18 as specified in section 423.2A, subsection 2, paragraph “a” , 19 including any interest and penalties, to the county’s account 20 in the local sales and services use tax fund for the county in 21 from which the tax was collected. The director shall credit 22 the use tax receipts as specified in section 423.43, subsection 23 1, paragraph “b” , subparagraph (1), subparagraph divisions (b) 24 and (c), including any interest and penalties, to the county’s 25 account in the local sales and use tax fund for the county 26 from which the use tax was paid. If the director is unable to 27 determine from which county any of the receipts were collected 28 or paid, as applicable , those receipts shall be allocated among 29 the possible counties based on allocation rules adopted by the 30 director. 31 b. The director shall credit the designated amount of the 32 increase in local sales and services tax receipts, as computed 33 in section 423B.10 , collected in an urban renewal area of an 34 eligible city that has adopted an ordinance pursuant to section 35 -18- LSB 6242XC (6) 89 md/jh 18/ 51
S.F. _____ 423B.10, subsection 2 , into a special city account in the local 1 sales and services use tax fund. 2 c. The director shall credit the local sales and services 3 tax receipts and interest and penalties from a city-imposed tax 4 under section 423B.1, subsection 2 , to the city’s account in 5 the local sales and services tax fund. 6 Sec. 53. Section 423B.7, subsection 2, paragraph a, Code 7 2022, is amended by striking the paragraph and inserting in 8 lieu thereof the following: 9 a. The director of revenue by the last day of each month 10 shall transfer to each city or county the amount of tax 11 receipts remitted to the department attributable to each city 12 or county from the preceding month. 13 Sec. 54. Section 423B.7, subsections 3 and 4, Code 2022, are 14 amended to read as follows: 15 3. Seventy-five percent of each county’s account shall be 16 remitted on the basis of the county’s population residing in 17 the unincorporated area where the tax was imposed and those the 18 incorporated areas where the tax was imposed as follows: 19 a. To the board of supervisors a pro rata share based upon 20 the percentage of the above population of the county residing 21 in the unincorporated area of the county where the tax was 22 imposed according to the most recent certified federal census. 23 b. To each city in the county where the tax was imposed 24 a pro rata share based upon the percentage of the city’s 25 population residing in the county to the above population of 26 the county according to the most recent certified federal 27 census. 28 c. If a subsequent certified census exists which modifies 29 that most recent certified federal census for a participating 30 jurisdiction under paragraphs “a” and “b” , the computations 31 under paragraphs “a” and “b” shall utilize the subsequent 32 certified census in the distribution formula under rules 33 established by the director of revenue. 34 4. Twenty-five percent of each county’s account shall 35 -19- LSB 6242XC (6) 89 md/jh 19/ 51
S.F. _____ be remitted based on the sum of property tax dollars levied 1 by the board of supervisors if the tax was imposed in the 2 unincorporated areas and by each city in the county where the 3 tax was imposed during the three-year period beginning July 1, 4 1982, and ending June 30, 1985, as follows: 5 a. To the board of supervisors a pro rata share based upon 6 the percentage of the total property tax dollars levied by the 7 board of supervisors during the above three-year period. 8 b. To each city council where the tax was imposed a pro rata 9 share based upon the percentage of property tax dollars levied 10 by the city during the above three-year period of the above 11 total property tax dollars levied by the board of supervisors 12 and each city where the tax was imposed during the above 13 three-year period. 14 Sec. 55. Section 423B.7, subsection 5, Code 2022, is amended 15 by striking the subsection. 16 Sec. 56. Section 423B.7, subsections 6 and 7, Code 2022, are 17 amended to read as follows: 18 6. From each special city account under subsection 1, 19 paragraph “b” , the sales and services tax revenues shall be 20 remitted to the city council for deposit in the special fund 21 created in section 403.19, subsection 2 , to be used by the city 22 as provided in section 423B.10 . The distribution from the 23 special city account is not subject to the distribution formula 24 provided in subsections 3 , and 4 , and 5 . 25 7. a. Subject to the requirement of paragraph “b” and the 26 requirements under section 423B.1, subsection 3 , local sales 27 and services tax moneys amounts received by a city or county 28 under this chapter may be expended for any lawful purpose of 29 the city or county, including but not limited to expenses 30 related to providing emergency medical services within the 31 applicable city or county. 32 b. Each city located in whole or in part in a qualified 33 county and each qualified county for the unincorporated area 34 for which the imposition of the local sales and services tax 35 -20- LSB 6242XC (6) 89 md/jh 20/ 51
S.F. _____ in the city or portion thereof or the unincorporated area, as 1 applicable, was revenue purpose statement approved at election 2 on or after January 1, 2019 2023 , shall require the use of 3 not less than fifty percent of the moneys received from the 4 qualified county’s account in the local sales and services 5 tax fund applicable county under this chapter for property 6 tax relief. However, for a county with a population of four 7 hundred thousand or more, a revenue purpose statement governing 8 the use of revenues for the unincorporated area of the county 9 approved on or after January 1, 2023, shall require the use of 10 seventy-five percent of the moneys received by the county under 11 this chapter for property tax relief. 12 c. For purposes of this subsection, property tax relief 13 includes payments under a chapter 28E agreement for purposes of 14 a regional transit district if such payments are used to reduce 15 the regional transit district levy under section 28M.5. For a 16 city located in whole or in part in a county with a population 17 of four hundred thousand or more, the use of revenues received 18 under this chapter for the purposes of this paragraph shall 19 not exceed ten percent of the amount received and for a county 20 with a population of four hundred thousand or more, for the 21 unincorporated area, shall not exceed twenty-five percent of 22 the amount received under this chapter. 23 Sec. 57. Section 423B.9, subsection 1, paragraphs b and c, 24 Code 2022, are amended to read as follows: 25 b. “Designated portion” means the portion of the local 26 option sales and services tax revenues received under this 27 chapter which is authorized to be expended for one or a 28 combination of purposes under an adopted public measure. 29 c. “Secondary recipient” means a political subdivision of 30 the state which is to receive revenues amounts from a local 31 option sales and services tax revenues under this chapter 32 over a period of years pursuant to the terms of a chapter 28E 33 agreement with one or more cities or counties. 34 Sec. 58. Section 423B.9, subsections 2 and 3, Code 2022, are 35 -21- LSB 6242XC (6) 89 md/jh 21/ 51
S.F. _____ amended to read as follows: 1 2. An issuer of public bonds which is a recipient of 2 revenues from a local option sales and services tax imposed 3 pursuant to this chapter may issue bonds in anticipation of 4 the collection of one or more designated portions of the 5 local option sales and services tax such revenues and may 6 pledge irrevocably an amount of the revenue derived from the 7 designated portions for each of the years the bonds remain 8 outstanding to the payment of the bonds. Bonds may be issued 9 only for one or more of the purposes set forth on the ballot 10 proposition concerning the imposition of the local option sales 11 and services tax in the revenue purpose statement , except bonds 12 shall not be issued which are payable from that portion of tax 13 revenues designated for property tax relief. The bonds may be 14 issued in accordance with the procedures set forth in either 15 subsection 3 or 4 . 16 3. The governing body of an issuer may authorize the 17 issuance of bonds which are payable from the designated portion 18 of the revenues of the local option sales and services tax 19 received under this chapter , and not from property tax, by 20 following the authorization procedures set forth for cities 21 in section 384.83 . Bonds may be issued for the purpose of 22 refunding outstanding and previously issued bonds under this 23 subsection without otherwise complying with the provisions of 24 this subsection . 25 Sec. 59. Section 423B.9, subsection 4, paragraph b, Code 26 2022, is amended to read as follows: 27 b. The provisions of chapter 76 apply to the bonds payable 28 as provided in this subsection , except that the mandatory levy 29 to be assessed pursuant to section 76.2 shall be at a rate 30 to generate an amount which together with the receipts from 31 the pledged designated portion of the local option sales and 32 services tax revenues received under this chapter is sufficient 33 to pay the interest and principal on the bonds. All amounts 34 collected as a result of the levy assessed pursuant to section 35 -22- LSB 6242XC (6) 89 md/jh 22/ 51
S.F. _____ 76.2 and paid out in the first instance for bond principal 1 and interest shall be repaid to the bond issuer which levied 2 the tax from the first available designated portion of local 3 option sales and services tax collections revenues received 4 under this chapter in excess of the requirement for the payment 5 of the principal and interest of the bonds and when repaid 6 shall be applied in reduction of property taxes. The amount 7 of bonds which may be issued under section 76.3 shall be the 8 amount which could be retired from the actual collections of 9 the designated portions of the local option sales and services 10 tax revenues received under this chapter for the last four 11 calendar quarters, as certified by the director of revenue. 12 The amount of tax revenues pledged jointly by other cities or 13 counties may be considered for the purpose of determining the 14 amount of bonds which may be issued. If the local option sales 15 and services tax has been in effect revenues have been received 16 under this chapter for less than four calendar quarters, the 17 tax collected revenues received within the shorter period may 18 be adjusted to project the collections amount of the designated 19 portion for the full year for the purpose of determining the 20 amount of the bonds which may be issued. The provisions of 21 this section constitute separate authorization for the issuance 22 of bonds and shall prevail in the event of conflict with 23 any other provision of the Code limiting the amount of bonds 24 which may be issued or the source of payment of the bonds. 25 Bonds issued under this section shall not limit or restrict 26 the authority of the bond issuer to issue bonds under other 27 provisions of the Code. 28 Sec. 60. Section 423B.9, subsection 5, Code 2022, is amended 29 to read as follows: 30 5. A city or county, jointly with one or more other 31 political subdivisions as provided in chapter 28E , may pledge 32 irrevocably any amount derived from the designated portions 33 of the revenues of the local option sales and services tax 34 received under this chapter to the support or payment of bonds 35 -23- LSB 6242XC (6) 89 md/jh 23/ 51
S.F. _____ of an issuer, issued for one or more purposes set forth on 1 the ballot proposition concerning the imposition of the local 2 option sales and services tax in the revenue purpose statement 3 or a political subdivision may apply the proceeds of its bonds 4 to the support of any such purpose. 5 Sec. 61. Section 423B.10, subsection 1, paragraph b, Code 6 2022, is amended to read as follows: 7 b. “Eligible city” means a city in which a local sales and 8 services tax imposed by the county applies or a city described 9 in section 423B.1, subsection 2 , paragraph “a” , and in which an 10 urban renewal area has been designated. 11 Sec. 62. Section 423B.10, subsections 2, 3, 5, and 6, Code 12 2022, are amended to read as follows: 13 2. a. Upon approval by the board of supervisors of each 14 applicable county pursuant to paragraph “b” , an eligible city 15 may by ordinance of the city council provide for the use of a 16 designated amount of the increased local sales and services 17 tax revenues collected received under this chapter which are 18 attributable to retail establishments in an urban renewal 19 area to fund urban renewal projects located in the area. The 20 designated amount may be all or a portion of such increased 21 revenues. 22 b. A city shall not adopt an ordinance under paragraph 23 “a” unless the board of supervisors of each county where the 24 urban renewal area from which such local sales and services 25 tax revenues are to be collected and used to fund urban 26 renewal projects is located first adopts a resolution approving 27 the collection and use of such local sales and services tax 28 revenues. 29 3. To determine the revenue increase for purposes of 30 subsection 2 , revenue amounts shall be calculated by the 31 department of revenue as follows: 32 a. Determine the amount of local sales and services tax 33 revenue collected and attributable to a one percent sales and 34 services tax from retail establishments located in the area 35 -24- LSB 6242XC (6) 89 md/jh 24/ 51
S.F. _____ comprising the urban renewal area during the base year. 1 b. Determine the current year one percent sales and services 2 tax revenue amount for each fiscal year following the base year 3 in the manner specified in paragraph “a” . 4 c. The excess of the amount determined in paragraph “b” over 5 the base year revenue amount determined in paragraph “a” is the 6 increase in the local sales and services tax revenues of which 7 the designated amount is to be deposited in the special city 8 account created in section 423B.7, subsection 6 . 9 5. In addition to the moneys received pursuant to the 10 ordinance authorized under subsection 2 , an eligible city 11 may deposit any other local sales and services tax revenues 12 received by it the city pursuant to the distribution formula in 13 section 423B.7, subsections 3, 4, and 5 , to the special fund 14 described in section 403.19, subsection 2 . 15 6. For purposes of this section , the eligible city shall 16 assist the department of revenue in identifying retail 17 establishments in the urban renewal area that are collecting 18 the local sales and services tax. This process shall be 19 ongoing until the ordinance is repealed. 20 Sec. 63. REPEAL. 2019 Iowa Acts, chapter 151, section 21, 21 is repealed. 22 Sec. 64. REPEAL. Sections 423B.2, 423B.3, 423B.4, 423B.5, 23 423B.6, and 423B.8, Code 2022, are repealed. 24 Sec. 65. EFFECTIVE DATE. This division of this Act takes 25 effect January 1, 2023. 26 DIVISION VI 27 NATURAL RESOURCES AND OUTDOOR RECREATION TRUST FUND 28 Sec. 66. Section 2.45, Code 2022, is amended by adding the 29 following new subsection: 30 NEW SUBSECTION . 5A. a. The legislative natural resources 31 and outdoor recreation trust fund review committee which 32 shall be composed of ten members of the general assembly, 33 consisting of five members from each chamber, to be appointed 34 by the legislative council. In appointing the five members 35 -25- LSB 6242XC (6) 89 md/jh 25/ 51
S.F. _____ of each chamber to the committee, the council shall appoint 1 three members from the majority party and two members from the 2 minority party. 3 b. The legislative natural resources and outdoor recreation 4 trust fund review committee shall have the powers and duties 5 described in section 2.49. 6 c. This subsection is repealed December 31, 2051. 7 Sec. 67. NEW SECTION . 2.49 Legislative natural resources 8 and outdoor recreation trust fund review committee. 9 1. The legislative natural resources and outdoor recreation 10 trust fund review committee shall meet during the legislative 11 interim in calendar years 2030, 2040, and 2050. The committee 12 shall consider the most effective ways to manage trust fund 13 moneys to further the purpose of Article VII, section 10, of 14 the Constitution of the State of Iowa. As part of its duties, 15 the committee may consider any of the following: 16 a. The administration of the trust fund, trust accounts, and 17 designated funds as provided in chapter 461. 18 b. The effectiveness of initiatives supported by trust fund 19 moneys as provided in chapter 461. 20 2. The committee shall report to the legislative council 21 the results of its considerations, which may include 22 recommendations and proposed legislation for consideration 23 during the next session of the general assembly. 24 3. This section is repealed December 31, 2051. 25 Sec. 68. Section 8.57, subsection 5, paragraph f, 26 subparagraph (1), subparagraph division (c), Code 2022, is 27 amended by striking the subparagraph division. 28 Sec. 69. Section 8.57, subsection 5, paragraph f, 29 subparagraph (1), subparagraph division (f), Code 2022, is 30 amended to read as follows: 31 (f) For the fiscal year beginning July 1, 2018, and for 32 each fiscal year thereafter, the total moneys in excess of the 33 moneys deposited under this paragraph “f” in the revenue bonds 34 debt service fund, the revenue bonds federal subsidy holdback 35 -26- LSB 6242XC (6) 89 md/jh 26/ 51
S.F. _____ fund, the vision Iowa fund, the water quality infrastructure 1 fund, the Iowa skilled worker and job creation fund, and the 2 general fund of the state shall be deposited in the rebuild 3 Iowa infrastructure fund and shall be used as provided in this 4 section , notwithstanding section 8.60 . 5 Sec. 70. Section 8.57B, subsection 1, Code 2022, is amended 6 to read as follows: 7 1. a. A water quality infrastructure fund is created within 8 the division of soil conservation and water quality of the 9 department of agriculture and land stewardship. 10 b. The fund shall consist of moneys deposited in the 11 fund pursuant to section 8.57, subsection 5 , paragraph “f” , 12 subparagraph (1), subparagraph division (c), moneys all of the 13 following: 14 (1) (a) Moneys transferred to the fund pursuant to section 15 423G.6 , and 461.33. 16 (b) This subparagraph (1) is repealed December 31, 2051. 17 (2) Moneys transferred or appropriations made to the fund 18 and transfers of interest, earnings, and moneys from other 19 funds as provided by law. 20 Sec. 71. Section 16.134A, subsection 2, paragraph a, 21 subparagraphs (1) and (2), Code 2022, are amended to read as 22 follows: 23 (1) Moneys transferred to the fund pursuant to section 24 423G.6 461.34 . 25 (2) This paragraph “a” is repealed on January 1, 2040 26 December 31, 2051 . 27 Sec. 72. Section 455A.17, Code 2022, is amended by striking 28 the section and inserting in lieu thereof the following: 29 455A.17 Regional meetings. 30 1. Beginning in calendar year 2023, and every four 31 calendar years thereafter, the department shall arrange 32 and conduct regional meetings to identify opportunities for 33 regional resource enhancement and protection, and to review 34 and recommend changes in resource enhancement and protection 35 -27- LSB 6242XC (6) 89 md/jh 27/ 51
S.F. _____ policies, programs, and funding. The department shall provide 1 outreach and educational services to those attending, which 2 shall include the distribution of information regarding 3 resource enhancement and protection expenditures. The 4 department shall promote attendance of interested persons for 5 each regional meeting. 6 2. The expenses of the department in making the arrangements 7 for and conducting regional meetings and providing outreach and 8 educational services shall be paid from moneys credited to the 9 administration fund created in section 456A.17. 10 Sec. 73. Section 455A.18, subsection 1, Code 2022, is 11 amended to read as follows: 12 1. a. An Iowa resources enhancement and protection fund is 13 created in the office of the treasurer of state. 14 b. The fund consists of all revenues of the following: 15 (1) (a) Moneys allocated from the natural resources and 16 outdoor recreation trust fund as provided in section 461.35. 17 (b) This subparagraph (1) is repealed December 31, 2051. 18 (2) Revenues and all other moneys lawfully credited or 19 transferred to the fund. The director shall certify monthly 20 the portions of the fund that are allocated to the various 21 accounts as provided under section 455A.19 . The director shall 22 certify before the twentieth of each month the portions of 23 the fund resulting from the previous month’s receipts to be 24 allocated to the various accounts. 25 Sec. 74. Section 455A.18, subsection 3, paragraph a, Code 26 2022, is amended by striking the paragraph. 27 Sec. 75. Section 455A.18, subsection 3, paragraph b, Code 28 2022, is amended to read as follows: 29 b. Section 8.33 does not apply to moneys appropriated under 30 this subsection credited to the fund . 31 Sec. 76. Section 461.2, Code 2022, is amended to read as 32 follows: 33 461.2 Definitions. 34 As used in this chapter , unless the context otherwise 35 -28- LSB 6242XC (6) 89 md/jh 28/ 51
S.F. _____ requires: 1 1. “Authority” means the economic development authority 2 created in section 15.105. 3 2. “Department” “Custodial department” means the department 4 of agriculture and land stewardship, the department of 5 management, the department of natural resources, or the 6 department of transportation. 7 3. “Designated fund” means the water quality infrastructure 8 fund created in section 8.57B, the water quality financial 9 assistance fund created in section 16.134A, or the Iowa 10 resources enhancement and protection fund created in section 11 455A.18. 12 2. 4. “Fiscal year” means the state fiscal year effective 13 as provided in section 3.12 . 14 3. 5. “Initiative” includes a program, project, practice, 15 strategy, or plan established or administered by an agency that 16 furthers , or under the supervision or oversight of, a custodial 17 department or the Iowa finance authority, if the initiative is 18 supported in whole or in part by trust fund moneys to further a 19 constitutional purpose as provided in section 461.3 . 20 6. “Iowa nutrient reduction strategy” means the same as 21 defined in section 455B.171. 22 7. “Nonpoint source” means a source of pollution other than 23 a point source. 24 8. “Point source” means the same as defined in section 25 455B.171. 26 9. “Public use area” means a park, preserve, recreation 27 area, forest, water body, or a land or water trail owned or 28 managed by the state or a political subdivision of the state. 29 4. 10. “Recreational purpose” includes means only hunting , ; 30 trapping , ; angling , ; horseback riding , ; swimming , ; boating , ; 31 camping , ; picnicking , ; hiking , ; biking; recreational shooting; 32 archery; using land or water trails; bird watching , ; nature 33 study , ; water skiing , ; snowmobiling ; , other summer and winter 34 sports, and viewing or enjoying historical, archaeological, 35 -29- LSB 6242XC (6) 89 md/jh 29/ 51
S.F. _____ scenic, or scientific sites. 1 11. “Trust account” means the natural resources trust 2 account created in section 461.32, the soil conservation and 3 nonpoint source water protection trust account created in 4 section 461.33, the watershed protection trust account created 5 in section 461.34, the local conservation partnership trust 6 account created in section 461.36, the water and land trails 7 trust account created in section 461.37, or the lake and stream 8 restoration trust account created in section 461.38. 9 5. 12. “Trust fund” means the natural resources and outdoor 10 recreation trust fund created in section 461.31 . 11 6. 13. “Trust fund moneys” means moneys originating from 12 credited to the natural resources and outdoor recreation trust 13 fund or moneys allocated from the trust fund, including but not 14 limited to moneys allocated to a trust account or allocated or 15 transferred to a designated fund . 16 14. “Water trail” means a point-to-point travel system on a 17 navigable water body capable of supporting a floating vessel 18 capable of carrying one or more persons on a recommended route 19 connecting the points. 20 Sec. 77. Section 461.3, Code 2022, is amended to read as 21 follows: 22 461.3 Constitutional purpose , and implementation , and 23 revenue . 24 1. This chapter is created for the constitutional purposes 25 of protecting and enhancing water quality and natural areas 26 in this state, including parks, trails, and fish and wildlife 27 habitat, and conserving agricultural soils in this state. 28 2. This chapter is intended to implement Article VII, 29 section 10, of the Constitution of the State of Iowa by 30 establishing the natural resources and outdoor recreation 31 trust fund, accounts in the including trust fund accounts , 32 and appropriating or allocating trust fund moneys to support 33 initiatives specified in subchapter IV . This chapter shall not 34 be construed to require the state to appropriate, allocate, 35 -30- LSB 6242XC (6) 89 md/jh 30/ 51
S.F. _____ or transfer other moneys to support those initiatives or 1 constitutional purposes. 2 Sec. 78. Section 461.11, subsection 2, Code 2022, is amended 3 to read as follows: 4 2. The heads of each department receiving trust fund moneys 5 the custodial departments and the director of the authority 6 shall regularly meet and whenever practicable collaborate in 7 decision making including by adopting rules providing for 8 the administration of the trust fund and trust accounts , 9 establishing funding priorities, and determining when it is 10 beneficial to provide joint funding of initiatives. 11 Sec. 79. NEW SECTION . 461.20 Information regarding trust 12 fund moneys. 13 1. Each year the department of revenue shall calculate 14 an estimate of the total revenue to be transferred to the 15 trust fund during the following fiscal year as required 16 pursuant to section 423.2A. Not later than May 1 of each 17 year, the department of revenue shall submit the estimate to 18 each custodial department, the authority, and the legislative 19 services agency. 20 2. A custodial department shall at least annually notify the 21 legislative services agency of transfers of trust fund moneys 22 from a trust account to another trust account or designated 23 fund as authorized in this chapter. 24 Sec. 80. Section 461.21, Code 2022, is amended to read as 25 follows: 26 461.21 Audit. 27 1. The auditor of state or a certified public accounting 28 firm appointed by the auditor of state shall conduct an annual 29 audit of the trust fund and all trust accounts and transactions 30 of the trust fund and trust accounts in the same manner as 31 provided for departments pursuant to chapter 11, subchapter I . 32 2. The auditor of state or the certified public accounting 33 firm appointed by the auditor as provided in subsection 1 34 shall be paid from trust fund moneys without reducing the 35 -31- LSB 6242XC (6) 89 md/jh 31/ 51
S.F. _____ percentage of trust fund moneys distributed allocated to the 1 Iowa resources enhancement and protection fund or any one a 2 trust account established or designated fund pursuant to this 3 chapter subchapter IV . 4 Sec. 81. Section 461.22, Code 2022, is amended to read as 5 follows: 6 461.22 Report Trust fund report . 7 The three departments department of management shall jointly 8 prepare and submit to the governor and the general assembly not 9 later than January 15 of each year a complete trust fund report 10 in an electronic format detailing all of the following: 11 1. The receipts and expenditures of the trust fund and its 12 trust accounts, a summary of initiatives supported by trust 13 fund moneys, the results of those expenditures, any performance 14 goals or measurements, and plans for future short-term or 15 long-term expenditures. 16 2. Recommendations An evaluation of the use of trust fund 17 moneys to further progress in achieving the goals of the Iowa 18 nutrient reduction strategy as prepared by the department of 19 agriculture and land stewardship, the department of natural 20 resources, and the college of agriculture and life sciences 21 of the Iowa state university of science and technology. The 22 evaluation shall be based on the latest credible findings and 23 recommendations recognized by those entities. The evaluation 24 may include recommendations to the governor and general 25 assembly, including legislation proposed by one or more of the 26 departments entities . 27 Sec. 82. Section 461.23, Code 2022, is amended to read as 28 follows: 29 461.23 Rules. 30 The department of revenue, the department of agriculture and 31 land stewardship, the department of management, the department 32 of natural resources, and the department of transportation , the 33 Iowa finance authority, and the economic development authority 34 shall adopt rules separately or jointly as necessary in order 35 -32- LSB 6242XC (6) 89 md/jh 32/ 51
S.F. _____ to implement and administer this chapter . 1 Sec. 83. Section 461.24, Code 2022, is amended by striking 2 the section and inserting in lieu thereof the following: 3 461.24 Public listing. 4 The department of management shall publish and maintain a 5 public listing of moneys credited to and allocated from the 6 trust fund, trust fund moneys allocated or transferred from 7 trust accounts, and trust fund moneys allocated or transferred 8 to designated funds to support initiatives. This section does 9 not require the disclosure of information that is confidential 10 as provided by rules adopted pursuant to section 461.23. 11 Sec. 84. NEW SECTION . 461.25 Use of trust fund moneys. 12 1. A custodial department shall not appropriate, allocate, 13 or transfer trust fund moneys except as provided in this 14 chapter. However, this subsection shall not be construed to 15 limit a custodial department from using trust fund moneys with 16 another person, including a custodial department, when engaging 17 in a joint initiative as authorized by law. 18 2. During any fiscal year, a custodial department shall not 19 use more than five percent of trust fund moneys allocated to 20 a trust account to pay for expenses incurred in administering 21 trust fund moneys allocated to that trust account. 22 3. In administering the use of trust fund moneys allocated 23 to a trust account, a custodial department shall provide a 24 higher priority to supporting initiatives that further goals of 25 the Iowa nutrient reduction strategy. 26 4. A custodial department shall administer the use of 27 trust fund moneys to support an initiative having primarily 28 a recreational purpose only if such use is in cooperation 29 with the authority. The authority shall review, score, and 30 rank applications to support such initiatives as part of a 31 competitive evaluation process. The scoring criteria must 32 further the economic development policy of the state as 33 provided in chapter 15. 34 5. When making a determination to support competing 35 -33- LSB 6242XC (6) 89 md/jh 33/ 51
S.F. _____ proposed initiatives relating to a public use area that 1 benefits a locality, a custodial department or the authority 2 shall provide a higher priority to supporting an initiative to 3 improve an existing public use area. 4 6. When making a determination to support a proposed 5 initiative to establish, improve, or expand a land trail, 6 the proposal shall not be approved unless the sponsor of the 7 proposal demonstrates to the custodial department or other 8 entity making the funding decision how the trail is to be 9 maintained by other sources of revenue. 10 7. In administering the use of trust fund moneys allocated 11 to a trust account to support an initiative relating to 12 the management of land, this chapter does not do any of the 13 following: 14 a. Prohibit the farming of the land in a manner that is 15 consistent with the Iowa nutrient reduction strategy. 16 b. Require a separation distance between an animal feeding 17 operation and a public use area that is more restrictive than 18 if the land were not managed pursuant to the initiative. 19 8. Trust fund moneys shall not be used to support any of the 20 following: 21 a. An initiative that establishes, improves, or expands a 22 single or multipurpose athletic field, baseball or softball 23 diamond, tennis court, golf course, swimming pool, or other 24 group or organized sport facility. 25 b. The taking of property by exercising the power of eminent 26 domain, including by acquiring property as provided in chapters 27 6A and 6B. 28 Sec. 85. Section 461.31, Code 2022, is amended to read as 29 follows: 30 461.31 Natural resources and outdoor recreation trust fund 31 —— creation. 32 1. A natural resources and outdoor recreation trust fund 33 is created within the state treasury. The trust fund shall be 34 administered by the department of management. 35 -34- LSB 6242XC (6) 89 md/jh 34/ 51
S.F. _____ 2. a. The trust fund shall be composed comprised of moneys 1 all of the following: 2 (1) Moneys transferred to the trust fund pursuant to section 3 423.2A. 4 (2) Other moneys required to be credited to the trust 5 fund by law and moneys accepted by a custodial department for 6 placement in an account established in this subchapter and the 7 trust fund from any source. 8 b. Trust fund moneys are exclusively appropriated by law 9 to carry out the constitutional purposes provided described in 10 section 461.3 . 11 c. Trust fund moneys shall supplement and not replace 12 moneys appropriated by the general assembly to support the 13 constitutional purposes provided in section 461.3 . 14 d. Trust fund moneys shall only be used to support voluntary 15 initiatives and shall not be used for regulatory efforts, 16 enforcement actions, or litigation. 17 3. In administering a trust fund account, a custodial 18 department may contract, sue and be sued, and authorize payment 19 for costs, fees, commissions, and other reasonable expenses 20 from the trust account. However, a custodial department shall 21 not in any manner directly or indirectly pledge the credit of 22 this state. 23 4. a. Except as provided in paragraph “b” , the treasurer 24 of state shall, each month as directed by the department of 25 management, allocate all trust fund moneys that have been 26 credited to the trust fund, including moneys transferred to the 27 trust fund as provided in section 423.2A, to each trust account 28 and designated fund as provided in this subchapter. 29 b. Notwithstanding sections 461.32 through 461.38, for the 30 fiscal year beginning July 1, 2023, and for each subsequent 31 fiscal year, only that amount as authorized by an Act of 32 the general assembly shall be allocated from the trust fund 33 to a trust account or designated fund as provided in this 34 subchapter. However, if for a fiscal year no Act of the 35 -35- LSB 6242XC (6) 89 md/jh 35/ 51
S.F. _____ general assembly authorizes trust fund moneys to be allocated 1 from the trust fund, the trust fund moneys shall be allocated 2 from the trust fund to the trust accounts and designated funds 3 as provided in this subchapter by operation of law. 4 5. a. Notwithstanding section 8.33 , any unexpended balance 5 in the trust fund or in an a trust account created within the 6 trust fund at the end of each fiscal year shall be retained in 7 the trust fund or the respective trust account. 8 b. Notwithstanding section 12C.7, subsection 2 , interest or 9 earnings on investments or time deposits of the moneys in the 10 trust fund and its respective trust accounts shall be credited 11 to the trust fund and its respective trust accounts. 12 c. The recapture of awards originating from an a trust 13 account and other repayments to an a trust account shall be 14 retained in that trust account. 15 Sec. 86. Section 461.32, Code 2022, is amended to read as 16 follows: 17 461.32 Natural resources trust account —— allocations. 18 1. A natural resources trust account is created in the trust 19 fund. Twenty-three The trust account shall be administered by 20 the department of natural resources. 21 2. Eighteen percent of the moneys credited to the trust fund 22 shall be allocated to the trust account. 23 2. 3. The trust account shall be used by the department of 24 natural resources to support all of the following initiatives: 25 a. The establishment, restoration, or enhancement of state 26 parks, state preserves, state forests, wildlife areas, wildlife 27 habitats, native prairies, and wetlands. 28 (1) A higher priority shall be provided to supporting 29 initiatives for the maintenance, preservation, or restoration 30 of land and a lower priority shall be provided to supporting 31 initiatives for the purchase or acquisition of land. 32 (2) The department shall utilize an index that includes a 33 comprehensive assessment mechanism to produce a statistically 34 verifiable basis for determining whether to approve or 35 -36- LSB 6242XC (6) 89 md/jh 36/ 51
S.F. _____ disapprove the purchase or acquisition of the land. The 1 department shall establish index criteria that justifies the 2 land’s removal from private ownership and use. 3 b. The construction or improvement of facilities located on 4 land owned or managed by the department. 5 b. c. Wildlife diversity. 6 c. d. Recreational purposes. 7 d. e. Technical assistance and financial incentives 8 provided to private landowners to promote the management of 9 forests, fisheries, recreational areas, wetlands, and wildlife. 10 e. f. The improvement of water trails, rivers , and streams. 11 f. g. Education and outreach that provide instruction 12 regarding natural history and the outdoors. The subjects 13 of such instruction may relate to opportunities involving a 14 recreational purposes purpose , outdoor safety, and or ethics. 15 3. The department of natural resources shall to every extent 16 possible consider its comprehensive plan provided in section 17 456A.31 when making funding decisions. 18 Sec. 87. Section 461.33, Code 2022, is amended to read as 19 follows: 20 461.33 Soil conservation and nonpoint source water protection 21 trust account —— allocations. 22 1. A soil conservation and nonpoint source water protection 23 trust account is created in the trust fund. Twenty The trust 24 account shall be administered by the department of agriculture 25 and land stewardship. 26 2. Thirty-four percent of the moneys credited to the trust 27 fund shall be allocated to the trust account. 28 3. Forty-seven percent of trust fund moneys allocated to 29 the trust account shall first be transferred as directed by the 30 department to any or all of the following: 31 a. The water quality infrastructure fund created in section 32 8.57B to support water quality agriculture infrastructure 33 programs created in section 466B.43 in order to reduce nutrient 34 loads from nonpoint sources. 35 -37- LSB 6242XC (6) 89 md/jh 37/ 51
S.F. _____ b. The water quality financial assistance fund created 1 in section 16.134A to support the water quality urban 2 infrastructure program created in section 466B.44. 3 2. 4. a. The account shall be used by the department of 4 agriculture and land stewardship remaining trust fund moneys 5 allocated to the trust account shall be used by the department 6 to support all of the following initiatives: 7 a. (1) Soil conservation and watershed protection, 8 including by supporting the department’s division of 9 soil conservation and water quality within the department 10 of agriculture and land stewardship and soil and water 11 conservation district commissioners. The department and 12 commissioners may provide for the installation establishment of 13 conservation practices and watershed protection improvements as 14 provided in chapters 161A , 161C , 461A , and 466 , and 466B . 15 b. (2) The conservation of highly erodible land. The 16 department of agriculture and land stewardship may execute 17 contracts with private landowners who agree to reserve such 18 land only for uses that prevent erosion in excess of the 19 applicable soil loss limits as established in section 161A.44 . 20 c. (3) Soil conservation or crop management practices 21 used on land producing biomass for biorefineries, including 22 cellulosic ethanol production. 23 3. b. The department of agriculture and land stewardship 24 may use unencumbered or unobligated trust fund moneys allocated 25 to the trust account to provide financial incentives or 26 technical assistance to landowners. 27 5. During a fiscal year, the department may transfer 28 unencumbered or unobligated trust fund moneys allocated to 29 the trust account for use by the department as is provided in 30 subsection 4 to any of the following: 31 a. The water quality infrastructure fund created in section 32 8.57B to support water quality agriculture infrastructure 33 programs created in section 466B.43 in order to reduce nutrient 34 loads from nonpoint sources. 35 -38- LSB 6242XC (6) 89 md/jh 38/ 51
S.F. _____ b. The water quality financial assistance fund created 1 in section 16.134A to support the water quality urban 2 infrastructure program created in section 466B.44. 3 Sec. 88. Section 461.34, Code 2022, is amended to read as 4 follows: 5 461.34 Watershed protection trust account —— allocations. 6 1. A watershed protection trust account is created in the 7 trust fund. Fourteen The trust account shall be administered 8 by the department of natural resources. 9 2. Fifteen percent of the moneys credited to the trust fund 10 shall be allocated to the trust account. 11 3. Forty-seven percent of trust fund moneys allocated 12 to the trust account shall first be transferred to the water 13 quality financial assistance fund created in section 16.134A 14 for appropriation as provided in that section. 15 2. 4. The account Of the remaining trust fund moneys 16 allocated to the trust account, fifty percent shall be used 17 cooperatively distributed for use by the department of 18 natural resources and the department of agriculture and land 19 stewardship to support all of the following initiatives: 20 a. Water water quality resource projects administered by 21 the department of natural resources to preserve watersheds, 22 including but not limited to all of the following: 23 (1) a. Projects to protect, restore, or enhance water 24 quality in the state through the provision of financial 25 assistance to communities for impairment-based, locally 26 directed watershed projects. The department may use the 27 account trust fund moneys to support the water resource 28 restoration sponsor program as provided in section 455B.199 . 29 (2) b. Regional and community watershed assessment, 30 planning, and prioritization efforts, including as provided in 31 chapter 466B . 32 c. Water quality protection programs provided in section 33 466.7 that relate to any of the following: 34 (1) The administration of geographic information systems 35 -39- LSB 6242XC (6) 89 md/jh 39/ 51
S.F. _____ for use in developing, monitoring, and displaying local 1 watershed information. 2 (2) An activity to support the collection and analysis of 3 water quality monitoring. 4 (3) Floodplain permitting. 5 (4) Flood protection education to provide information to 6 local officials regarding floodplain management. 7 b. 5. Surface Of the remaining trust fund moneys allocated 8 to the trust account, fifty percent shall be distributed for 9 use by the department of agriculture and land stewardship 10 to support surface water protection projects and practices 11 administered by the department of agriculture and land 12 stewardship or the department of natural resources, as 13 described in the Iowa nutrient reduction strategy including but 14 not limited to the installation of permanent vegetation cover, 15 filter strips, grass waterways, edge-of-field practices, and 16 riparian forest buffers; dredging; and bank stabilization. The 17 departments of agriculture and land stewardship and natural 18 resources department may use the account trust fund moneys 19 to support the conservation buffer strip program provided in 20 section 466.4 and the conservation reserve enhancement program 21 as provided in section 466.5 . 22 3. 6. The departments’ A decision by a department to 23 prioritize initiatives may be based on the priority list of 24 watersheds provided in section 456A.33A . 25 7. During a fiscal year, the department of natural 26 resources or the department of agriculture and land stewardship 27 may transfer unencumbered or unobligated trust fund moneys 28 distributed to the custodial department pursuant to subsection 29 4 or 5 to the water quality financial assistance fund created 30 in section 16.134A. 31 Sec. 89. Section 461.35, Code 2022, is amended to read as 32 follows: 33 461.35 Iowa resources enhancement and protection fund —— 34 allocation. 35 -40- LSB 6242XC (6) 89 md/jh 40/ 51
S.F. _____ Thirteen Ten percent of the moneys credited to the trust 1 fund shall be allocated to the Iowa resources enhancement 2 and protection fund created in section 455A.18 for further 3 allocation as provided in section 455A.19 . 4 Sec. 90. Section 461.36, Code 2022, is amended by striking 5 the section and inserting in lieu thereof the following: 6 461.36 Local conservation partnership trust account —— 7 allocations. 8 1. A local conservation partnership trust account is 9 created in the trust fund. The trust account shall be 10 administered by the department of natural resources. 11 2. Nine percent of the moneys credited to the trust fund 12 shall be allocated to the trust account. 13 3. The department shall allocate the trust fund moneys 14 credited to the account to local communities participating 15 in the local conservation partnership program as provided in 16 section 461.36A. 17 Sec. 91. NEW SECTION . 461.36A Local conservation 18 partnership program. 19 1. As used in this section, unless the context otherwise 20 requires: 21 a. “Department” means the department of natural resources. 22 b. “Local community” includes a political subdivision or 23 a watershed management authority created pursuant to section 24 466B.22. 25 2. The department shall establish and administer a local 26 conservation partnership program to provide financing to local 27 communities to do any of the following: 28 a. Maintain and improve parks, preserves, wildlife areas, 29 wildlife habitats, native prairies, forests, or wetlands. 30 b. Promote wildlife diversity. 31 c. Further a recreational purpose. 32 d. Improve rivers and streams. 33 e. Sponsor education and outreach programs and projects that 34 provide instruction regarding natural history and the outdoors. 35 -41- LSB 6242XC (6) 89 md/jh 41/ 51
S.F. _____ The subjects of such instruction may relate to opportunities 1 involving a recreational purpose, outdoor safety, or ethics. 2 The programs and projects may assist Iowa students studying in 3 fields of science, technology, engineering, and mathematics. 4 f. Further any other purpose described in section 350.1. 5 3. As part of a local conservation partnership under the 6 program, two or more local communities may enter into chapter 7 28E agreements, and a local community may cooperate with 8 the federal government or a nongovernmental organization. 9 A nongovernmental organization shall not be eligible to 10 participate in a local community partnership under the program 11 unless the nongovernmental organization submits an application 12 in association with a political subdivision or county 13 conservation board and enters into a chapter 28E agreement with 14 the political subdivision or county conservation board. 15 4. a. A local community is not eligible to receive moneys 16 from the department under the program to support a local 17 conservation partnership, unless the local community finances 18 a minimum percentage of the estimated or total cost of the 19 initiative, whichever is less. 20 b. The minimum amount of the cost-share contribution by a 21 local community, as described in paragraph “a” , shall be as 22 follows: 23 (1) Ten percent for a local community located in a county 24 having a population of fifteen thousand or less. 25 (2) Twenty-five percent for a local community located in a 26 county having a population of more than fifteen thousand but 27 less than one hundred thousand. 28 (3) Seventy-five percent for a local community located in a 29 county having a population of one hundred thousand or more. 30 Sec. 92. Section 461.37, Code 2022, is amended to read as 31 follows: 32 461.37 Trails Water and land trails trust account —— 33 allocations. 34 1. A water and land trails trust account is created in the 35 -42- LSB 6242XC (6) 89 md/jh 42/ 51
S.F. _____ trust fund. Ten The trust account shall be administered by the 1 department of transportation. 2 2. Four percent of the moneys credited to the trust fund 3 shall be allocated to the trust account. 4 2. 3. The Of the amount of trust fund moneys allocated 5 to the trust account, fifty percent shall be distributed for 6 use by the department of transportation and the department of 7 natural resources shall use moneys in the account to support 8 initiatives related to the design, establishment, maintenance, 9 improvement, and expansion of land trails. 10 3. 4. The Of the amount of trust fund moneys allocated to 11 the trust account, fifty percent shall be distributed for use 12 by the department of natural resources may use the account to 13 support the design, establishment, maintenance, improvement, 14 and expansion of water trails. The department shall provide 15 priority to stream restoration. 16 5. a. During a fiscal year, and pursuant to an agreement 17 between the department of transportation and the department 18 of natural resources, either custodial department that is 19 distributed trust fund moneys for use under this section may 20 transfer unencumbered or unobligated trust fund moneys to the 21 other custodial department for use by the other custodial 22 department as provided in this section. 23 b. During a fiscal year, and pursuant to an agreement 24 between the department of transportation and the department 25 of natural resources, the department of transportation 26 may transfer unencumbered or unobligated trust fund moneys 27 allocated to the trust account and distributed for use by 28 the department of transportation to another trust account 29 administered by the department of natural resources for use by 30 the department of natural resources. 31 Sec. 93. Section 461.38, Code 2022, is amended to read as 32 follows: 33 461.38 Lake and stream restoration trust account —— 34 allocations. 35 -43- LSB 6242XC (6) 89 md/jh 43/ 51
S.F. _____ 1. A lake and stream restoration trust account is created in 1 the trust fund. Seven The trust account shall be administered 2 by the department of natural resources. 3 2. Ten percent of the moneys credited to the trust fund 4 shall be allocated to the trust account. 5 2. 3. The department of natural resources shall use moneys 6 in allocated to the trust account to support public all of the 7 following: 8 a. Public lake restoration initiatives as follows: 9 a. (1) An initiative shall account for a lake’s 10 recreational purpose , and provide for environmental, aesthetic, 11 ecological, and social value. It must improve water quality 12 further a goal of the Iowa nutrient reduction strategy . 13 b. (2) The department’s A decision by the department to 14 prioritize an initiative may be based on the department’s lake 15 restoration plan and report as provided in section 456A.33B and 16 the Iowa nutrient reduction strategy . 17 b. The stabilization and restoration of stream banks. 18 Sec. 94. NEW SECTION . 461.51 Repeal. 19 This chapter is repealed December 31, 2051. 20 Sec. 95. CODE EDITOR DIRECTIVE. 21 1. The Code editor is directed to make the following 22 transfers: 23 a. Section 461.36A, as enacted in this division of this Act, 24 to section 455A.31. 25 b. Section 461.35, as amended in this division of this Act, 26 to section 461.41. 27 2. The Code editor shall correct internal references in the 28 Code and in any enacted legislation as necessary due to the 29 enactment of this section. 30 Sec. 96. REPEAL. Section 455A.20, Code 2022, is repealed. 31 Sec. 97. EFFECTIVE DATE. This division of this Act takes 32 effect January 1, 2023. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -44- LSB 6242XC (6) 89 md/jh 44/ 51
S.F. _____ the explanation’s substance by the members of the general assembly. 1 This bill relates to state and local revenue and finances 2 and modifies sales and use taxes, the charitable conservation 3 contribution tax credit available against individual and 4 corporate income taxes, the automobile rental excise tax, the 5 water service tax, the local option tax, and credits moneys to 6 the natural resource and outdoor recreation trust fund. 7 DIVISION I —— SALES AND USE TAX. An amendment to the Iowa 8 Constitution was ratified on November 2, 2010, which created 9 a natural resources and outdoor recreation trust fund (fund) 10 and dedicated a portion of state revenues to the fund for 11 the purposes of protecting and enhancing water quality and 12 natural areas in the state including parks, trails, and fish 13 and wildlife habitat, and conserving agricultural soils in 14 the state (Article VII, section 10). The fund is codified in 15 Code section 461.31. Pursuant to the amendment, the amount 16 credited to the fund will be equal to the amount generated 17 by an increase in the state sales tax rate occurring after 18 the effective date of the constitutional amendment, but shall 19 not exceed the amount that a state sales tax rate of 0.375 20 percent would generate. The state sales tax rate has not 21 been increased since the effective date of the constitutional 22 amendment, so no amounts have been credited to the fund. The 23 bill increases the sales tax rate and the use tax rate from 6 24 percent to 7 percent beginning January 1, 2023. In lieu of the 25 local option and sales services tax revenue repealed in another 26 division of the bill, the bill transfers a specified amount of 27 the state sales and use tax revenues collected to the local 28 sales and use tax fund established under Code chapter 423B, 29 for allocation and expenditure in a manner similar to that 30 which was provided for local sales and services tax revenues. 31 However, as provided in another division of the bill, amounts 32 resulting from the increase in the use tax for the period 33 beginning January 1, 2023, through December 31, 2042, are 34 deposited in the local use tax supplement fund to be used for 35 -45- LSB 6242XC (6) 89 md/jh 45/ 51
S.F. _____ purposes of that fund. The bill, as the result of Article VII, 1 section 10, of the Constitution of the State of Iowa, also 2 amends the transfer of sales tax revenues to the secure an 3 advanced vision for education fund in Code section 423.2A(2). 4 DIVISION II —— AUTOMOBILE RENTAL EXCISE TAX. The bill 5 increases the automobile rental excise tax from 5 percent to 7 6 percent on the rental of automobiles rented on or after January 7 1, 2023. 8 DIVISION III —— WATER SERVICE TAX. The bill raises the 9 water service tax on the furnishing of water to consumers from 10 6 percent to 7 percent. 11 Currently, one-half of the moneys collected from the water 12 service tax are deposited into the general fund of the state 13 and one-half of the moneys are deposited into the water quality 14 financial assistance fund created in Code section 16.134A. 15 The bill strikes the provision requiring one-half of the 16 water service tax moneys be deposited into the water quality 17 financial assistance fund and requires all moneys generated 18 from the water service tax be deposited into the general fund 19 of the state. 20 The bill also strikes the future repeal of the water service 21 excise tax. 22 The division takes effect January 1, 2023. 23 DIVISION IV —— CHARITABLE CONSERVATION CONTRIBUTION 24 TAX CREDIT. The bill prohibits a charitable conservation 25 contribution tax credit from being claimed against the 26 individual or corporate income tax, except for qualified real 27 property interests conveyed prior to January 1, 2023. The bill 28 allows the credit in excess of tax liability to carry forward 29 for qualified real property interests conveyed prior to January 30 1, 2023. The bill preserves existing rights and is intended to 31 not limit, modify, or otherwise adversely affect any amount of 32 the tax credit issued, awarded, or allowed prior to the repeal 33 date of any tax credit. The division takes effect January 1, 34 2023, and applies to tax years beginning on or after that date. 35 -46- LSB 6242XC (6) 89 md/jh 46/ 51
S.F. _____ DIVISION V —— LOCAL OPTION TAXES. Code chapter 423B 1 authorizes, following approval at election, the imposition of 2 a local option sales and services tax at a rate not to exceed 3 one percent to be administered similarly to the state sales 4 and services tax and authorizes the imposition of a local 5 vehicle tax. The bill strikes the authorization for the local 6 vehicle tax and also strikes the authorization to impose the 7 local option sales and services tax under Code chapter 423B, 8 but instead authorizes cities and counties to expend specified 9 state sales and use tax revenues that are deposited in the 10 local sales and use tax fund following the increase of the 11 state sales and use taxes rates in previous sections of the 12 bill. 13 Under the bill, sales and services tax revenue credited to 14 and deposited in each county’s account within the local sales 15 and use tax fund must be expended by each recipient county 16 and city as required by the jurisdiction’s revenue purpose 17 statement, including a revenue purpose statement approved at 18 election prior to January 1, 2023, and in effect on or set to 19 take effect on or after January 1, 2023, for the use of local 20 option sales and use tax revenue previously collected under 21 Code chapter 423B, or be used to reduce specified property tax 22 levies. 23 The bill also modifies the requirements and permissible uses 24 of funds received under Code chapter 423B. The bill specifies 25 that for a county with a population of 400,000 or more, a 26 revenue purpose statement governing the use of revenues for the 27 unincorporated area of the county approved on or after January 28 1, 2023, shall require the use of 75 percent of such moneys 29 for property tax relief. Additionally, the bill provides that 30 property tax relief includes payments under a Code chapter 31 28E agreement for purposes of a regional transit district if 32 such payments are used to reduce the regional transit district 33 levy. For a city located in whole or in part in a county with 34 a population of 400,000 or more, the use of revenues received 35 -47- LSB 6242XC (6) 89 md/jh 47/ 51
S.F. _____ under Code chapter 423B for such regional transit district 1 purposes shall not exceed 10 percent of the amount received 2 and for a county with a population of 400,000 or more, for the 3 unincorporated area, shall not exceed 25 percent. 4 The board of supervisors of each county and the city 5 council of each city may adopt by resolution a revenue purpose 6 statement for the expenditure of funds received under Code 7 chapter 423B. 8 The revenues transferred to the local sales and use tax fund 9 continue to be allocated to the specific county account for 10 the county in which the tax was collected. Additionally, all 11 cities and counties are eligible to receive the allocation of 12 revenues, not just those that had previously approved the local 13 option tax. 14 As provided in another division of the bill, specified 15 amounts of use tax revenue is transferred to the local use 16 tax supplement fund, as created in the bill. Moneys in the 17 local use tax supplement fund are annually appropriated to the 18 department of revenue to be used for supplement payments to 19 cities and counties. For each year during the period beginning 20 January 1, 2023, through December 31, 2042, each city or county 21 for the unincorporated portion of the county shall receive a 22 local use tax supplement payment equal to the difference, but 23 not less than zero, between the amount of revenue received 24 by the city or county under Code section 423B.7, Code 2022, 25 for the period beginning January 1, 2022, and ending December 26 31, 2022, minus the amount that would have been received by 27 that city or county for that period if all cities and the 28 county were eligible for distributions of such revenues under 29 Code section 423B.7, Code 2022. If moneys in the fund are 30 insufficient to pay all supplement amounts for the year, the 31 director of revenue shall prorate the payment of the supplement 32 payments. The supplement payment is required to be combined 33 with and be used in the same manner and be subject to the same 34 requirements as moneys received by the city or county under 35 -48- LSB 6242XC (6) 89 md/jh 48/ 51
S.F. _____ Code section 423B.7 for that year. The bill establishes a 1 future repeal of the Code section establishing the supplement 2 payments on January 1, 2043. Moneys in the fund upon the 3 repeal shall be transferred to the appropriate county accounts 4 for the counties from which the tax was paid. 5 Code section 423B.10 allows a city in which a local sales 6 and services tax is imposed to, by ordinance and following 7 approval of the board of supervisors, to provide for the use 8 of a designated amount of increased local option sales and 9 services tax revenue for urban renewal purposes. The bill 10 modifies provisions governing this authorization to provide for 11 the use of a specified amount of the applicable increased state 12 sales tax revenues deposited in the local sales and use tax 13 fund in lieu of the increased local option sales and services 14 tax revenue. The bill allows city ordinances providing for the 15 use of certain local option sales and services tax revenues for 16 urban renewal purposes in effect on January 1, 2023, to remain 17 in effect until