H.F. 713 Section 1. Section 714.27A, subsection 1, paragraph a, Code 1 2023, is amended to read as follows: 2 a. “Business transaction” means an exchange of consideration 3 for a catalytic converter between a scrap metal dealer, as 4 defined in section 714.27 , and another scrap metal dealer, 5 an authorized vehicle recycler licensed under chapter 321H 6 operating a business at a fixed location, a motor vehicle 7 dealer licensed under chapter 322 operating a business at a 8 fixed location, a towable recreational vehicle dealer licensed 9 under chapter 322C operating a business at a fixed location, a 10 mechanic or an automotive repair facility operating a business 11 at a fixed location, or a person operating a similar business 12 at a fixed location in another state , or a person registered 13 as an authorized seller or authorized purchaser with the 14 department of revenue . 15 Sec. 2. Section 714.27A, subsection 2, paragraphs b and c, 16 Code 2023, are amended to read as follows: 17 b. For a business transaction in which the person selling 18 the catalytic converter operates a business at a fixed location 19 in this state, the person shall provide to the purchaser a 20 copy of the person’s valid sales tax permit issued pursuant to 21 chapter 423 , a copy of the person’s valid business license or 22 permit, or a copy of the person’s certificate of registration 23 as an authorized seller . For a business transaction in which 24 the person selling the catalytic converter operates a business 25 at a fixed location in another state and is authorized to 26 conduct a business transaction in this state, the person shall 27 provide to the purchaser a copy of the person’s valid sales tax 28 permit issued pursuant to chapter 423 , if the person has such 29 a permit, or a copy of the person’s valid business license or 30 permit from the other state. If a person is unable to provide 31 the documentation required in this paragraph, the person shall 32 instead comply with paragraph “c” . 33 c. For transactions other than business transactions, the 34 person selling the catalytic converter shall provide to the 35 -1- LSB 2534HV (3) 90 th/ns 1/ 5

H.F. 713 purchaser an original receipt or invoice for a replacement 1 catalytic converter purchased fewer than thirty days before 2 the person sells the replaced catalytic converter, a signed 3 affidavit attesting to the seller’s valid ownership of the 4 catalytic converter, or a junking certificate for a vehicle 5 that was issued fewer than thirty days before the person sells 6 the catalytic converter. 7 (1) The receipt, invoice, affidavit, or junking certificate 8 presented by the person to the purchaser must be unmarked by a 9 purchaser pursuant to subsection 3 . 10 (2) This paragraph does not apply to a transaction if the 11 person presents proof, unmarked pursuant to subsection 3 , to 12 the purchaser that the sale is approved by the sheriff of the 13 county in which the vehicle from which the catalytic converter 14 was removed is registered. 15 Sec. 3. Section 714.27A, subsection 3, paragraph b, Code 16 2023, is amended to read as follows: 17 b. A person who purchases a catalytic converter shall mark 18 the receipt, invoice, affidavit, junking certificate, or proof 19 of sheriff approval presented under subsection 2 to indicate 20 the catalytic converter has been sold. The person shall take a 21 photograph of the catalytic converter that clearly identifies 22 the item as a catalytic converter. 23 Sec. 4. Section 714.27A, Code 2023, is amended by adding the 24 following new subsection: 25 NEW SUBSECTION . 4A. a. A person may register as an 26 authorized seller or as an authorized purchaser with the 27 department of revenue. The fee for an authorized seller or 28 authorized purchaser registration is one hundred dollars 29 and such authorization is valid for one year. A person who 30 conducts a business transaction on behalf of another person 31 shall be considered an authorized seller or authorized 32 purchaser if the other person on whose behalf the person 33 is conducting the transaction is an authorized seller or 34 authorized purchaser, respectively. 35 -2- LSB 2534HV (3) 90 th/ns 2/ 5

H.F. 713 b. The fees collected under this subsection shall be 1 deposited in the general fund of the state. 2 c. The department of revenue shall adopt rules pursuant 3 to chapter 17A to implement and administer this subsection 4 including but not limited to rules requiring a person applying 5 for registration as an authorized seller or authorized 6 purchaser to provide the person’s residential address or 7 business address at a fixed location and rules providing for 8 issuance of a certificate of registration as an authorized 9 seller or authorized purchaser. 10 Sec. 5. Section 714.27A, subsection 6, unnumbered paragraph 11 1, Code 2023, is amended to read as follows: 12 A person, including a person who conducts a business 13 transaction on behalf of another person, who intentionally 14 violates this section shall be subject to a civil penalty as 15 follows: 16 Sec. 6. Section 714.27A, subsection 7, unnumbered paragraph 17 1, Code 2023, is amended to read as follows: 18 Proof that a person, including a person who conducted a 19 business transaction on behalf of another person, intentionally 20 violated subsection 2 or 3 shall be evidence from which the 21 court or jury may infer any of the following: 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 Under current law, for a business transaction, as defined in 26 Code section 714.27A, in which the seller of a used catalytic 27 converter operates a business at a fixed location in this 28 state, the seller must provide to the purchaser a copy of the 29 seller’s valid sales tax permit issued pursuant to Code chapter 30 423. This bill authorizes such a seller to alternatively 31 provide a copy of the seller’s valid business license or 32 permit or a copy of the person’s certificate of registration 33 as an authorized seller. The seller of a catalytic converter 34 operating a business at a fixed location in another state is 35 -3- LSB 2534HV (3) 90 th/ns 3/ 5

H.F. 713 authorized to provide a copy of the person’s valid business 1 license or permit from the other state under current law. 2 The bill adds persons registered as an authorized seller or 3 authorized purchaser to the list of persons eligible to conduct 4 a business transaction involving a used catalytic converter. 5 A person may become an authorized seller or purchaser by 6 registering as such with the department of revenue (DOR). The 7 registration fee is $100 and the authorization is valid for 8 one year. The fee must be deposited in the general fund of 9 the state. A person who conducts a business transaction on 10 behalf of another person is considered an authorized seller or 11 purchaser if the other person on whose behalf the person is 12 conducting a transaction is an authorized seller or purchaser. 13 DOR is required to adopt administrative rules including but not 14 limited to rules requiring a person applying for registration 15 as an authorized seller or purchaser to provide the person’s 16 residential address or business address at a fixed location and 17 rules providing for issuance of a certificate of registration 18 as an authorized seller or purchaser. 19 For transactions other than business transactions under 20 current law, the person selling the used catalytic converter 21 is required to provide to the purchaser an original receipt or 22 invoice for a replacement catalytic converter purchased fewer 23 than 30 days before the person sells the replaced catalytic 24 converter, or a junking certificate for a vehicle that was 25 issued fewer than 30 days before the person sells the catalytic 26 converter. The bill authorizes a seller to provide a signed 27 affidavit attesting to the seller’s valid ownership of the 28 catalytic converter instead of the original receipt, invoice, 29 or junking certificate. The bill requires a purchaser to mark 30 an affidavit in the same manner the purchaser must mark other 31 acceptable forms of proof of ownership under Code section 32 714.27A. 33 Under current law, a person, including a person who 34 conducts a business transaction on behalf of another person, 35 -4- LSB 2534HV (3) 90 th/ns 4/ 5

H.F. 713 who violates Code section 714.27A is subject to a civil 1 penalty ranging from $1,000 to $10,000 based on the number 2 of violations that occur within a two-year period. Proof 3 that a person, including a person who conducted a business 4 transaction on behalf of another person, violated Code section 5 714.27A(2) or 714.27A(3) is evidence from which the court or 6 jury may infer culpability relating to the theft of a catalytic 7 converter. The bill requires that a person must intentionally 8 violate Code section 714.27A to be subject to the corresponding 9 civil or criminal penalty, as applicable. 10 -5- LSB 2534HV (3) 90 th/ns 5/ 5