House Study Bill 694 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF REVENUE BILL) A BILL FOR An Act relating to the administration of state taxation, the 1 lottery, and alcoholic beverages under the purview of the 2 department of revenue, making appropriations, and including 3 effective date and retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5331XD (6) 90 jm/jh

S.F. _____ H.F. _____ DIVISION I 1 DISCLOSURE OF TAX INFORMATION 2 Section 1. Section 421.19, subsection 2, Code 2024, is 3 amended by striking the subsection and inserting in lieu 4 thereof the following: 5 2. The department may notify federal, state, or local 6 law enforcement agencies, and may disclose state returns, 7 state return information, state investigative information or 8 audit information, or any other state information, to such law 9 enforcement agencies, if the department has information that 10 indicates any of the following: 11 a. A person intentionally filed a false claim, affidavit, 12 return, or other information with intent to evade tax or obtain 13 a refund, credit, or other benefit from the department. 14 b. A person failed to file a return with intent to evade a 15 tax or filing requirement. 16 c. A person failed to pay with the intent to evade tax. 17 d. A person committed any act or omission that is a criminal 18 offense under a provision of this title administered by the 19 department. 20 Sec. 2. Section 421.19, subsection 3, Code 2024, is amended 21 to read as follows: 22 3. Notwithstanding sections 422.20 and 422.72 , the 23 department may disclose state returns, state return 24 information, state investigative or audit information, or any 25 other state information as provided under this section . 26 Sec. 3. EFFECTIVE DATE. This division of this Act, being 27 deemed of immediate importance, takes effect upon enactment. 28 DIVISION II 29 ANNUAL REPORTING 30 Sec. 4. Section 421.60, subsection 2, paragraph k, Code 31 2024, is amended by striking the paragraph. 32 Sec. 5. Section 422.75, Code 2024, is amended to read as 33 follows: 34 422.75 Statistics —— publication. 35 -1- LSB 5331XD (6) 90 jm/jh 1/ 26

S.F. _____ H.F. _____ The department shall prepare and publish an annual report 1 which shall include statistics reasonably available, with 2 respect to the operation of this chapter , including amounts 3 collected, classification of taxpayers, and such other facts 4 as are deemed pertinent and valuable. The annual report shall 5 also include the reports and information required pursuant to 6 section 421.60, subsection 2 , paragraph “k” . 7 DIVISION III 8 PROPERTY TAX —— EXTENSIONS 9 Sec. 6. Section 425.20, subsection 3, Code 2024, is amended 10 to read as follows: 11 3. In case of sickness, absence, or other disability of 12 the claimant or if, in the judgment of the director of revenue 13 or the director of health and human services , as applicable, 14 good cause exists and the claimant requests an extension, the 15 director of health and human services may extend the time for 16 filing a claim for reimbursement and the director of revenue 17 may extend the time for filing a claim for credit . However, 18 any further time granted shall not extend beyond December 31 19 of the year following the year in which the claim was required 20 to be filed. Claims filed as a result of this subsection shall 21 be filed with the director of health and human services or the 22 director of revenue, as applicable, who shall provide for the 23 reimbursement of the claim to the claimant. 24 DIVISION IV 25 FARM TENANCY INCOME TAX EXCLUSION 26 Sec. 7. Section 422.7, subsection 14, paragraph a, Code 27 2024, is amended to read as follows: 28 a. Subtract, to the extent included, net income received 29 by an eligible individual pursuant to a farm tenancy agreement 30 covering real property held by the eligible individual for 31 ten or more years, if the eligible individual materially 32 participated in a farming business for ten or more years in the 33 aggregate . 34 Sec. 8. Section 422.7, subsection 14, paragraph f, Code 35 -2- LSB 5331XD (6) 90 jm/jh 2/ 26

S.F. _____ H.F. _____ 2024, is amended by adding the following new subparagraph: 1 NEW SUBPARAGRAPH . (04) “Held” shall be determined with 2 reference to the holding period provisions of section 1223 of 3 the Internal Revenue Code and the federal regulations pursuant 4 thereto. 5 DIVISION V 6 PASS-THROUGH ENTITIES 7 Sec. 9. Section 422.25C, subsection 2, Code 2024, is amended 8 to read as follows: 9 2. For tax years beginning on or after January 1, 2020, any 10 adjustments to a partnership’s or pass-through entity’s items 11 of income, gain, loss, expense, or credit, or an adjustment to 12 such items allocated to a partner that holds an interest in a 13 partnership or pass-through entity for the reviewed year by 14 the department as a result of a state partnership audit, shall 15 be determined at the partnership level or pass-through entity 16 level in the same manner as provided by section 6221(a) of the 17 Internal Revenue Code and the regulations thereunder unless a 18 different treatment is specifically provided in this title . 19 The provisions of sections 6222, 6223, and 6227 of the Internal 20 Revenue Code and the regulations thereunder shall also apply to 21 a partnership or pass-through entity and its direct or indirect 22 partners in the same manner as provided in such sections unless 23 a different treatment is specifically provided in this title . 24 For purposes of applying such sections, due account shall be 25 made for differences in federal and Iowa terminology. The 26 adjustment provided by section 6221(a) of the Internal Revenue 27 Code shall be determined as provided in such section but shall 28 be based on Iowa taxable income or other tax attributes of 29 the partnership or pass-through entity as determined pursuant 30 to this chapter for the reviewed year. The department shall 31 issue a notice of adjustment to the partnership or pass-through 32 entity. Such notice shall be treated as an assessment for the 33 purposes of section 422.25 , and the notice shall be appealable , 34 except as provided in section 422.25, by the partnership or 35 -3- LSB 5331XD (6) 90 jm/jh 3/ 26

S.F. _____ H.F. _____ pass-through entity pursuant to sections 422.28 and 422.29 and 1 shall be issued within the time period provided by section 2 422.25 . Once the adjustments to partnership-related or 3 pass-through entity-related items or reallocations of income, 4 gains, losses, expenses, credits, and other attributes among 5 such partners for the reviewed year are finally determined, 6 the partnership or pass-through entity and any direct partners 7 or indirect partners shall then be subject to the provisions 8 of section 422.25, subsection 1 , paragraph “e” , and section 9 422.25A in the same manner as if the state partnership audit 10 were a federal partnership level audit, and as if the final 11 state partnership audit adjustment were a final federal 12 partnership adjustment. The penalty exceptions in section 13 421.27, subsection 2 , paragraphs “b” and “c” , shall not apply 14 to a state partnership audit. 15 Sec. 10. EFFECTIVE DATE. This division of this Act, being 16 deemed of immediate importance, takes effect upon enactment. 17 Sec. 11. RETROACTIVE APPLICABILITY. This division of this 18 Act applies retroactively to January 1, 2024. 19 DIVISION VI 20 SALES TAX CHANGES 21 Sec. 12. Section 423.36, subsection 9, paragraph a, Code 22 2024, is amended to read as follows: 23 a. Except as provided in paragraph “b” , purchasers, users, 24 and consumers of tangible personal property, specified digital 25 products, or enumerated services taxed pursuant to subchapter 26 II or III of this chapter or chapter 423B may be authorized, 27 pursuant to rules adopted by the director, to remit tax owed 28 directly to the department instead of the tax being collected 29 and paid by the seller. To qualify for a direct pay tax permit, 30 the purchaser, user, or consumer must accrue a tax liability of 31 more than four eight thousand dollars in tax under subchapters 32 II and III in a semimonthly monthly period and make deposits 33 and file returns pursuant to section 423.31 . This authority 34 shall not be granted or exercised except upon application to 35 -4- LSB 5331XD (6) 90 jm/jh 4/ 26

S.F. _____ H.F. _____ the director and then only after issuance by the director of a 1 direct pay tax permit. 2 Sec. 13. Section 423.37, subsection 1, paragraph a, Code 3 2024, is amended to read as follows: 4 a. As soon as practicable after a return is filed and 5 within three years after the return is filed, the department 6 may examine the return, assess and determine the tax due if 7 the return is found to be incorrect, and give notice to the 8 person liable for the tax of the assessment and determination 9 as provided in paragraph “b” . If a return, when filed, is 10 incorrect or insufficient, the department shall determine 11 the amount of tax due from information or knowledge the 12 department is able to obtain. The determination may be made 13 using any generally recognized valid and reliable sampling 14 technique, whether or not the person being audited has complete 15 records , and if mutually agreed upon by the department and 16 the person being audited . The period for the examination and 17 determination of the correct amount of tax is unlimited in the 18 case of a false or fraudulent return made with the intent to 19 evade tax. 20 DIVISION VII 21 MOTOR FUEL TAXES 22 Sec. 14. Section 452A.3, subsection 1, paragraph b, 23 unnumbered paragraph 1, Code 2024, is amended to read as 24 follows: 25 On and after July 1, 2026, an excise tax of thirty cents is 26 imposed on each gallon of ethanol blended gasoline classified 27 as E-15 or higher. Before July 1, 2026, the rate of the 28 excise tax on ethanol blended gasoline classified as E-15 or 29 higher shall be based on the number of gallons of ethanol 30 blended gasoline classified as E-15 or higher that are 31 distributed in this state as expressed as a percentage of the 32 number of gallons of motor fuel distributed in this state, 33 which is referred to as the distribution percentage. For 34 purposes of this paragraph, only ethanol blended gasoline and 35 -5- LSB 5331XD (6) 90 jm/jh 5/ 26

S.F. _____ H.F. _____ nonblended gasoline, not including aviation gasoline, shall 1 be used in determining the percentage basis for the excise 2 tax. The department shall determine the percentage basis 3 for each determination period beginning January 1 and ending 4 December 31 based on data from the reports filed pursuant to 5 section 452A.33 . Before June 1, the department may amend the 6 distribution percentage due to a mistake, if there is a late 7 report filed by a retail dealer to the department under section 8 452A.33, subsection 1, or if the distribution percentage is 9 not accurate. The rate for the excise tax shall apply for the 10 period beginning July 1 and ending June 30 following the end 11 of the determination period. Before July 1, 2026, the rate 12 of the excise tax on each gallon of ethanol blended gasoline 13 classified as E-15 or higher shall be as follows: 14 Sec. 15. Section 452A.3, subsection 3, paragraph a, 15 subparagraph (2), unnumbered paragraph 1, Code 2024, is amended 16 to read as follows: 17 Except as otherwise provided in this section and in this 18 subchapter , this subparagraph shall apply to the excise tax 19 imposed on each gallon of biodiesel blended fuel classified 20 as B-11 or higher used for any purpose for the privilege of 21 operating motor vehicles in this state. On and after July 1, 22 2026, the rate of the excise tax on each gallon of biodiesel 23 blended fuel classified as B-11 or higher is thirty-two 24 and five-tenths cents. Before July 1, 2026, the rate of 25 the excise tax shall be based on the number of gallons of 26 biodiesel blended fuel classified as B-11 or higher that are 27 distributed in this state as expressed as a percentage of 28 the number of gallons of special fuel for diesel engines of 29 motor vehicles distributed in this state, which is referred 30 to as the distribution percentage. The department shall 31 determine the percentage basis for each determination period 32 beginning January 1 and ending December 31 based on data from 33 the reports filed pursuant to section 452A.33 . Before June 34 1, the department may amend the distribution percentage due 35 -6- LSB 5331XD (6) 90 jm/jh 6/ 26

S.F. _____ H.F. _____ to a mistake, if there is a late report filed by a retail 1 dealer to the department under section 452A.33, subsection 1, 2 or the distribution percentage is not accurate. The rate of 3 the excise tax shall apply for the period beginning July 1 and 4 ending June 30 following the end of the determination period. 5 Before July 1, 2026, the rate of the excise tax on each gallon 6 of biodiesel blended fuel classified as B-11 or higher shall 7 be as follows: 8 Sec. 16. Section 452A.15, subsection 5, Code 2024, is 9 amended to read as follows: 10 5. The director may impose a civil penalty against any 11 person who fails to timely file the reports or keep the records 12 required under this section . The penalty shall be one hundred 13 dollars for the first violation and shall increase by one 14 hundred dollars for each additional violation occurring in the 15 calendar year in which the first violation occurred. 16 Sec. 17. Section 452A.33, subsection 2, unnumbered 17 paragraph 1, Code 2024, is amended to read as follows: 18 On or before April 1 the department shall deliver a report 19 to the governor and the legislative services agency. Before 20 June 1, the department may amend the report due to a mistake, 21 if there is a late report by a retail dealer under subsection 22 1, or if the report is not accurate. The report shall compile 23 information reported by retail dealers to the department as 24 provided in this section and shall at least include all of the 25 following: 26 Sec. 18. Section 452A.41, subsection 5, paragraph a, Code 27 2024, is amended to read as follows: 28 a. For the purpose of determining the amount of liability 29 for the electric fuel tax, each dealer and user shall file with 30 the department not later than July 31 for the period beginning 31 January 1 and ending June 30, and not later than January 30 32 31 for the period beginning July 1 and ending December 30 31 , 33 a biannual tax return certified under penalties for false 34 certification. The return shall show, with reference to each 35 -7- LSB 5331XD (6) 90 jm/jh 7/ 26

S.F. _____ H.F. _____ location at which fuel is delivered or placed by the dealer or 1 user into the battery or other energy storage device of any 2 electric motor vehicle during the next preceding six calendar 3 months, information as required by the department. On and 4 after January 1, 2026, the department may require by rule that 5 such tax returns be filed quarterly. 6 Sec. 19. Section 452A.44, Code 2024, is amended by adding 7 the following new subsection: 8 NEW SUBSECTION . 4. If electric fuel is sold or dispensed 9 for a nontaxable purpose, the purchaser may complete and 10 provide an exemption certificate produced by the department to 11 the license holder. 12 DIVISION VIII 13 VETERANS TRUST FUND AND LOTTERY 14 Sec. 20. Section 99G.3, Code 2024, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 17A. “Setoff program” means the program 17 administered pursuant to section 421.65. 18 Sec. 21. Section 99G.7, subsection 1, paragraph e, Code 19 2024, is amended by striking the paragraph. 20 Sec. 22. Section 99G.39, subsection 3, Code 2024, is amended 21 to read as follows: 22 3. Two million five hundred thousand dollars in lottery 23 revenues shall be transferred each fiscal year to the veterans 24 trust fund established pursuant to section 35A.13 prior to 25 deposit of the lottery revenues in the general fund pursuant 26 to section 99G.40 . However, if the balance of the veterans 27 trust fund is fifty million dollars or more on both July 1 of 28 the current fiscal year and July 1 of the preceding fiscal 29 year , the moneys shall be appropriated to the department for 30 distribution to county directors of veteran affairs, with fifty 31 percent of the moneys to be distributed equally to each county 32 and fifty percent of the moneys to be distributed to each 33 county based upon the population of veterans in the county, 34 so long as the moneys distributed to a county do not supplant 35 -8- LSB 5331XD (6) 90 jm/jh 8/ 26

S.F. _____ H.F. _____ moneys appropriated by that county for the county director of 1 veteran affairs. 2 Sec. 23. Section 99G.41, subsections 1, 2, 3, and 4, Code 3 2024, are amended to read as follows: 4 1. Any claimant agency may submit to the department a 5 list of the names of all persons indebted to such claimant 6 agency or to persons on whose behalf the claimant agency is 7 acting. The A lottery prize payment awarded as cash or cash 8 equivalents is subject to the setoff program. Additionally, a 9 debtor and the full amount of the debt shall be compiled in a 10 list, and collectible from any lottery winnings prize payment 11 awarded as cash or cash equivalents due the debtor without 12 regard to limitations on the amounts that may be collectible in 13 increments through garnishment or other proceedings. Such list 14 shall constitute a valid lien upon and claim of lien against 15 the lottery winnings prize payment of any debtor named in such 16 list. The list shall contain the names of the debtors, their 17 social security numbers if available, and any other information 18 that assists the department in identifying the debtors named in 19 the list. The list shall be treated the same as setoff program 20 information under section 421.65, subsection 2, paragraph “a” . 21 2. The department is authorized and directed to withhold 22 any winnings paid out directly by the department subject to the 23 lien created by this section , and send notice to the winner or 24 send notice as directed by the setoff program . However, if the 25 winner appears and claims winnings in person, the department 26 shall notify the winner at that time by hand delivery of such 27 action. The department shall pay the funds over to the agency 28 administering the offset to the setoff program. 29 3. Notwithstanding the provisions of section 99G.34 which 30 prohibit disclosure by the department of certain portions 31 of the contents of prize winner records or information, 32 and notwithstanding any other confidentiality statute, 33 the department may provide to a claimant agency the setoff 34 program and public agency, as defined in section 421.65, all 35 -9- LSB 5331XD (6) 90 jm/jh 9/ 26

S.F. _____ H.F. _____ information necessary to accomplish and effectuate the intent 1 of this section . 2 4. The information obtained by a claimant agency from the 3 department in accordance with this section shall retain its 4 confidentiality and shall only be used by a claimant agency 5 in the pursuit of its debt collection duties and practices. 6 Any employee or prior employee of any claimant agency who 7 unlawfully discloses any such information for any other 8 purpose, except as otherwise specifically authorized by law, 9 shall be subject to the same penalties specified by law for 10 unauthorized disclosure of confidential information by an agent 11 or employee of the department under this chapter . 12 DIVISION IX 13 ALCOHOLIC BEVERAGES 14 Sec. 24. Section 123.3, Code 2024, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 36A. “Operating still” means a still that 17 is registered with the federal alcohol and tobacco tax and 18 trade bureau of the United States department of the treasury 19 and is actively used to manufacture spirits. 20 Sec. 25. Section 123.30, subsection 4, Code 2024, is amended 21 to read as follows: 22 4. Notwithstanding any provision of this chapter to the 23 contrary, a person holding a retail alcohol license to sell 24 alcoholic beverages for consumption on the licensed premises 25 may permit a customer to remove one unsealed bottle of wine 26 for consumption off the premises if the customer has purchased 27 and consumed a portion of the bottle of wine on the licensed 28 premises. The licensee or the licensee’s agent shall securely 29 reseal such bottle in a bag designed so that it is visibly 30 apparent that the resealed bottle of wine has not been tampered 31 with and provide a dated receipt for the resealed bottle of 32 wine to the customer. A wine bottle resealed pursuant to the 33 requirements of this subsection is subject to the requirements 34 of sections 321.284 and 321.284A . A person holding a retail 35 -10- LSB 5331XD (6) 90 jm/jh 10/ 26

S.F. _____ H.F. _____ alcohol license to sell alcoholic beverages for consumption on 1 the licensed premises may permit a customer to carry an open 2 container of wine from the person’s licensed premises into 3 another immediately adjacent licensed premises that is covered 4 by a license or permit that authorizes the consumption of wine, 5 a temporarily closed public right-of-way, or a private place. 6 Sec. 26. Section 123.30, Code 2024, is amended by adding the 7 following new subsection: 8 NEW SUBSECTION . 5. A person holding a retail alcohol 9 license to sell alcoholic beverages for consumption on the 10 licensed premises may permit a customer to carry an open 11 container of wine or beer from the person’s licensed premises 12 to one of the following immediately adjacent locations: 13 a. Another licensed premises that authorizes the consumption 14 of beer or wine. 15 b. A temporarily closed public right-of-way. 16 c. A private place. 17 Sec. 27. Section 123.43A, subsection 6, Code 2024, is 18 amended to read as follows: 19 6. Notwithstanding any provision of this chapter to the 20 contrary or the fact that a person is the holder of a class 21 “A” native distilled spirits license, a native distillery may 22 be granted a class “C” retail alcohol license as defined in 23 section 123.30 for the same premises licensed under a class “A” 24 native distilled spirits license where the manufacturing of 25 native distilled spirits occurs . A native distillery may be 26 granted not more than two class “C” retail alcohol licenses. 27 A manufacturer of native distilled spirits distillery may be 28 issued a class “C” retail alcohol license regardless of whether 29 the manufacturer is also a manufacturer of beer pursuant to a 30 class “A” beer permit or a manufacturer of native wine pursuant 31 to a class “A” wine permit. 32 Sec. 28. Section 123.45, subsection 3, Code 2024, is amended 33 to read as follows: 34 3. A person engaged in the wholesaling of beer or wine 35 -11- LSB 5331XD (6) 90 jm/jh 11/ 26

S.F. _____ H.F. _____ may sell only disposable glassware, which is constructed of 1 paper, paper laminated, or plastic materials and designed 2 primarily for personal consumption on a one-time usage 3 basis, to retailers for use within the premises of licensed 4 establishments, for an amount which is greater than or equal 5 to an amount which represents the greater of either the amount 6 paid for the disposable glassware by the supplier or the amount 7 paid for the disposable glassware by the wholesaler. Also, 8 notwithstanding any other provision of this chapter or the 9 fact that a person is the holder of a class “A” beer permit, 10 a native brewery may be granted not more than two a class “C” 11 retail alcohol licenses license or not more than two a special 12 class “C” retail alcohol licenses license , both as defined in 13 section 123.30 , for the same premises licensed under a class 14 “A” beer permit where the manufacturing of beer occurs. A 15 native brewery may be granted not more than two class “C” 16 retail alcohol licenses or two special class “C” retail alcohol 17 licenses. A native brewery may be issued a class “C” retail 18 alcohol license or a special class “C” retail alcohol license, 19 regardless of whether that person is also a manufacturer 20 of native distilled spirits pursuant to a class “A” native 21 distilled spirits license or a manufacturer of native wine 22 pursuant to a class “A” wine permit. 23 Sec. 29. Section 123.176, subsection 5, Code 2024, is 24 amended to read as follows: 25 5. Notwithstanding any other provision of this chapter 26 or the fact that a person is the holder of a class “A” wine 27 permit , a person engaged in the business of manufacturing 28 native wine may be granted a class “C” retail alcohol license 29 or special class “C” retail native wine license as defined in 30 section 123.30 , for the same premises licensed under a class 31 “A” wine permit where the manufacturing of native wine occurs . 32 A manufacturer of native wine may be granted not more than 33 two class “C” retail alcohol licenses or special class “C” 34 retail native wine licenses. A manufacturer of native wine 35 -12- LSB 5331XD (6) 90 jm/jh 12/ 26

S.F. _____ H.F. _____ may be issued a class “C” retail alcohol license or special 1 class “C” retail native wine license regardless of whether the 2 manufacturer is also a manufacturer of beer pursuant to a class 3 “A” beer permit or a manufacturer of native distilled spirits 4 pursuant to a class “A” native distilled spirits license. 5 DIVISION X 6 INHERITANCE TAX —— FUTURE CODE CHANGES DUE TO REPEAL 7 Sec. 30. Section 12D.9, subsection 3, Code 2024, is amended 8 to read as follows: 9 3. State For a death occurring before January 1, 2025, state 10 inheritance tax treatment of interests in Iowa educational 11 savings plans shall be as provided in section 450.4, subsection 12 8 . This subsection shall apply to all Iowa educational savings 13 plans existing on or after July 1, 1998. 14 Sec. 31. Section 12I.8, subsection 3, Code 2024, is amended 15 to read as follows: 16 3. State For a death occurring before January 1, 2025, state 17 inheritance tax treatment of interests in Iowa ABLE savings 18 plans shall be as provided in section 450.4, subsection 9 . 19 Sec. 32. Section 12I.10, subsection 3, Code 2024, is amended 20 to read as follows: 21 3. State For a death occurring before January 1, 2025, state 22 inheritance tax treatment of interests in the qualified ABLE 23 program with which the state has contracted pursuant to this 24 section shall be as provided in section 450.4, subsection 9 . 25 Sec. 33. Section 16.177, subsection 8, Code 2024, is amended 26 to read as follows: 27 8. Bonds issued under this section are declared to be issued 28 for an essential public and governmental purpose and all bonds 29 issued under this section shall be exempt from taxation by the 30 state of Iowa and the interest on the bonds shall be exempt 31 from the state income tax and the any state inheritance tax. 32 Sec. 34. Section 321.47, subsection 2, paragraph a, Code 33 2024, is amended to read as follows: 34 a. The persons entitled under the laws of descent and 35 -13- LSB 5331XD (6) 90 jm/jh 13/ 26

S.F. _____ H.F. _____ distribution to the possession and ownership of a vehicle owned 1 in whole or in part by a decedent who died intestate, upon 2 filing an affidavit stating the name and date of death of the 3 decedent, the right to possession and ownership of the persons 4 filing the affidavit, and that there has been no administration 5 of the decedent’s estate, which instrument must also contain 6 an agreement by the affiant to indemnify creditors of the 7 decedent who would be entitled to levy execution upon the motor 8 vehicle to the extent of the value of the motor vehicle, shall, 9 upon complying with the other title transfer requirements of 10 this chapter , be issued a registration card for the decedent’s 11 interest in the vehicle and a certificate of title to the 12 vehicle. If a decedent died testate, and either the will is 13 not probated or is admitted to probate without administration, 14 the persons entitled to the possession and ownership of 15 a vehicle owned in whole or in part by the decedent may 16 file an affidavit and, upon complying with the other title 17 transfer requirements of this chapter , shall be issued a 18 registration card for the decedent’s interest in the vehicle 19 and a certificate of title to the vehicle. The affidavit 20 must contain the same information and indemnity agreement 21 as is required in cases of intestacy under this subsection . 22 Chapter 450 is not For a death occurring before January 1, 23 2025, a requirement of chapter 450 shall not be considered 24 satisfied by the filing of the affidavit provided for in this 25 subsection . If, from the records in the office of the county 26 treasurer, there appear to be any liens on the vehicle, the 27 certificate of title must contain a statement of the liens 28 unless the application is accompanied by proper evidence of 29 the satisfaction or extinction of such liens. Evidence of 30 extinction includes but is not limited to an affidavit of the 31 applicant stating that a security interest was foreclosed as 32 provided in chapter 554, article 9, part 6 . The department 33 shall waive the certificate of title fee and surcharge required 34 under sections 321.20 , 321.20A , 321.23 , 321.46 , 321.52 , and 35 -14- LSB 5331XD (6) 90 jm/jh 14/ 26

S.F. _____ H.F. _____ 321.52A if the person entitled to possession and ownership of 1 a vehicle, as provided in this subsection , is the surviving 2 spouse of a decedent. 3 Sec. 35. Section 331.602, subsection 23, Code 2024, is 4 amended to read as follows: 5 23. Forward For deaths occurring before January 1, 2025, 6 forward to the director of revenue a copy of any deed, bill of 7 sale, or other transfer which shows that it is made or intended 8 to take effect at or after the death of the person executing 9 the instrument as provided in section 450.81 . 10 Sec. 36. Section 331.756, subsection 57, Code 2024, is 11 amended to read as follows: 12 57. Represent For a death occurring before January 1, 2025, 13 represent the state in litigation relating to the inheritance 14 tax if requested by the department of revenue as provided in 15 section 450.1 . 16 Sec. 37. Section 421.27, subsection 1, paragraph d, 17 subparagraph (13), Code 2024, is amended to read as follows: 18 (13) That For a death occurring before January 1, 2025, 19 that an Iowa inheritance tax return is filed for an estate 20 within the later of nine months from the date of death or sixty 21 days from the filing of a disclaimer by the beneficiary of the 22 estate refusing to take the property or right or interest in 23 the property. 24 Sec. 38. Section 421.60, subsection 2, paragraph c, 25 subparagraph (1), Code 2024, is amended to read as follows: 26 (1) If the notice of assessment or denial of a claim for 27 refund relates to a tax return filed pursuant to section 28 422.14 , or pursuant to chapter 450 for a death occurring before 29 January 1, 2025, by the taxpayer which designates an individual 30 as an authorized representative of the taxpayer with respect to 31 that return, or if a power of attorney has been filed with the 32 department by the taxpayer which designates an individual as 33 an authorized representative of the taxpayer with respect to 34 any tax that is included in the notice of assessment or denial 35 -15- LSB 5331XD (6) 90 jm/jh 15/ 26

S.F. _____ H.F. _____ of a claim for refund, a copy of the notice together with any 1 additional information required to be sent to the taxpayer 2 shall be sent to the authorized representative as well. 3 Sec. 39. Section 422.27, subsection 1, Code 2024, is amended 4 to read as follows: 5 1. A final account of a personal representative , as defined 6 in section 450.1 , shall not be allowed by any court unless the 7 account shows, and the judge of the court finds, that all taxes 8 imposed by this subchapter upon the personal representative, 9 which have become payable, have been paid, and that all taxes 10 which may become due are secured by bond or deposit, or are 11 otherwise secured. The certificate of acquittances of the 12 department of revenue is conclusive as to the payment of the 13 tax to the extent of the acquittance. This subsection does 14 not apply if all property in the estate of a decedent is 15 held in joint tenancy with right of survivorship by husband 16 and wife alone. For purposes of this subsection, “personal 17 representative” means an administrator, executor, or trustee as 18 each is defined in section 633.3. 19 Sec. 40. Section 455G.6, subsection 14, Code 2024, is 20 amended to read as follows: 21 14. Bonds issued under the provisions of this section are 22 declared to be issued for an essential public and governmental 23 purpose and all bonds issued under this subchapter shall be 24 exempt from taxation by the state of Iowa and the interest on 25 the bonds shall be exempt from the state income tax and the any 26 state inheritance tax. 27 Sec. 41. Section 496C.14, subsection 6, paragraph h, Code 28 2024, is amended to read as follows: 29 h. Notwithstanding the provisions of this section , 30 payment of any part of the purchase price for shares of a 31 deceased shareholder shall not be required until the executor 32 or administrator of the deceased shareholder provides 33 any indemnity, release, or other document from any taxing 34 authority, which is reasonably necessary to protect the 35 -16- LSB 5331XD (6) 90 jm/jh 16/ 26

S.F. _____ H.F. _____ corporation against liability for any estate , inheritance, and 1 death taxes tax, or any inheritance tax for a death occurring 2 before January 1, 2025 . 3 Sec. 42. Section 524.805, subsection 8, Code 2024, is 4 amended to read as follows: 5 8. A state bank may receive deposits from one or more 6 persons with the provision that upon the death of the 7 depositors the deposit account shall be the property of the 8 person or persons designated by the deceased depositors as 9 shown on the deposit account records of the state bank. After 10 payment by the state bank, the proceeds shall remain subject 11 to the any debts of the decedent and the any payment of Iowa 12 inheritance tax , if any for a death occurring prior to January 13 1, 2025 . A state bank paying the person or persons designated 14 shall not be liable as a result of that action for any debts 15 of the decedent or for any estate, inheritance, or succession 16 taxes which may be due this state. 17 Sec. 43. Section 541A.2, subsection 6, unnumbered paragraph 18 1, Code 2024, is amended to read as follows: 19 An individual development account closed in accordance 20 with this subsection is not subject to the limitations and 21 benefits provided by this chapter but is subject to state tax 22 in accordance with the provisions of section 422.7, subsection 23 17 , and in accordance with the provisions of section 450.4, 24 subsection 6 , for a death occurring before January 1, 2025 . An 25 individual development account may be closed for any of the 26 following reasons: 27 Sec. 44. Section 602.8102, subsection 63, Code 2024, is 28 amended to read as follows: 29 63. Carry out duties relating to the inheritance tax as 30 provided in chapter 450 for deaths occurring before January 1, 31 2025 . 32 Sec. 45. Section 633.21, Code 2024, is amended to read as 33 follows: 34 633.21 Appraisers’ fees and referees’ fees fixed by rule. 35 -17- LSB 5331XD (6) 90 jm/jh 17/ 26

S.F. _____ H.F. _____ The district judges of each judicial district shall by rule 1 fix the fees of probate referees, and also provide, insofar as 2 practicable, a uniform schedule of compensation for inheritance 3 tax appraisers, other appraisers, brokers, and agents employed 4 at estate expense. 5 Sec. 46. Section 633.31, subsection 2, paragraph a, Code 6 2024, is amended to read as follows: 7 a. For services performed in short form probates 8 pursuant to sections 450.22 and 450.44 for deaths occurring 9 before January 1, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15.00 10 Sec. 47. Section 633.356, subsection 1, unnumbered 11 paragraph 1, Code 2024, is amended to read as follows: 12 When the gross value of the decedent’s personal property 13 that would otherwise be distributed by will or intestate 14 succession is or has been, at any time since the decedent’s 15 death, fifty thousand dollars or less and there is no real 16 property , or for deaths occurring before January 1, 2025, the 17 real property passes to persons exempt from inheritance tax 18 as joint tenants with full rights of survivorship pursuant to 19 chapter 450 , and if forty days have elapsed since the death of 20 the decedent, a successor as defined in subsection 2 may, by 21 furnishing an affidavit prepared pursuant to subsection 3 or 22 8 , and without procuring letters of appointment, do any of the 23 following with respect to one or more items of such personal 24 property: 25 Sec. 48. Section 633.356, subsection 3, paragraph a, 26 subparagraph (3), Code 2024, is amended to read as follows: 27 (3) That the gross value of the decedent’s personal property 28 that would otherwise be distributed by will or intestate 29 succession is, or has been at any time since the decedent’s 30 death, fifty thousand dollars or less and there is no real 31 property , or for deaths occurring before January 1, 2025, the 32 real property passes to persons exempt from inheritance tax 33 as joint tenants with full rights of survivorship pursuant to 34 chapter 450 . 35 -18- LSB 5331XD (6) 90 jm/jh 18/ 26