Iowa Legislature: Bulletin_9_22

Bulletin 09-22-2021

Front matter not included

ARC 5929CEconomic Development Authority[261]Notice of Intended Action

Proposing rule making related to broadband forward and telecommuter forward certifications and providing an opportunity for public comment

The Economic Development Authority hereby proposes to rescind Chapter 24, “Emergency Shelter Grants Program,” and adopt a new Chapter 24, “Broadband Forward and Telecommuter Forward Certifications,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 15.106A and 2021 Iowa Acts, House File 871.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 15E.167 as enacted by 2021 Iowa Acts, House File 871.Purpose and Summary Pursuant to 2021 Iowa Acts, House File 871, the Authority shall establish broadband forward and telecommuter forward certifications. The purpose of the broadband forward certification is to encourage cities, counties, and townships (“political subdivisions”) to further develop broadband infrastructure and access to broadband. The purpose of the telecommuter forward certification is to encourage political subdivisions to further develop and promote the availability of telecommuting. New Chapter 24 is proposed to replace the chapter relating to the Emergency Shelter Grants Program. In 2010, administration of the Emergency Shelter Grants Program was transferred to the Iowa Finance Authority.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Authority for a waiver of the discretionary provisions, if any, pursuant to 261—Chapter 199. Public Comment Any interested person may submit written or oral comments concerning this proposed rule making. Written or oral comments in response to this rule making must be received by the Authority no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making action is proposed:

ITEM 1. Rescind 261—Chapter 24 and adopt the following new chapter in lieu thereof: CHAPTER 24BROADBAND FORWARD AND TELECOMMUTER FORWARD CERTIFICATIONS

261—24.1(15E) Authority. The authority for establishing this program is provided in Iowa Code section 15E.167 as enacted by 2021 Iowa Acts, House File 871.

261—24.2(15E) Purposes. The purpose of the broadband forward certification is to encourage political subdivisions to further develop broadband infrastructure and access to broadband. The purpose of the telecommuter forward certification is to encourage political subdivisions to further develop and promote the availability of telecommuting.

261—24.3(15E) Definitions. "Applicant" means a political subdivision that submits an application to the authority for a broadband forward certification or telecommuter forward certification. "Authority" means the economic development authority created in Iowa Code section 15.105. "Broadband" means the same as defined in Iowa Code section 8B.1. "Broadband infrastructure" means the same as defined in Iowa Code section 8B.1. "Certification" means a certificate issued to a political subdivision that meets the criteria in rule 261—24.5(15E) or 261—24.6(15E). "Communications service provider" means a service provider that provides broadband service. "Political subdivision" means a city, county, or township. "Program" means the broadband forward and telecommuter forward certification program established in this chapter.

261—24.4(15E) Application; review; approval. 24.4(1) Application. The authority will develop a standardized application process and make information on applying available on the authority’s website at www.iowaeda.com. To apply for certification under the program, a political subdivision shall submit an application to the authority in the form and manner prescribed by the authority. A political subdivision may apply for broadband forward certification and telecommuter forward certification concurrently. 24.4(2) Review. The authority will review each complete application to determine whether an applicant meets the criteria in rule 261—24.5(15E) or 261—24.6(15E). 24.4(3) Approval. The authority may approve, deny or defer applications for certification. If the authority approves an application for certification, the authority will issue a broadband forward or telecommuter forward certificate and assist the political subdivision in publicizing its certification.

261—24.5(15E) Broadband forward certification. 24.5(1) Application requirements. To obtain broadband forward certification, a political subdivision shall submit to the authority an application indicating all of the following: a. The political subdivision’s support and commitment to promote the availability of broadband. b. Existing or proposed ordinances encouraging the further development of broadband infrastructure and access to broadband. c. Efforts to secure local funding for the further development of broadband infrastructure and access to broadband. d. A single point of contact for the political subdivision for all matters related to broadband and broadband infrastructure. 24.5(2) Single point of contact. The single point of contact designated pursuant to paragraph 24.5(1)“d” shall be responsible for all of the following: a. Coordination and partnership with the authority, communications service providers, realtors, economic development professionals, employers, employees, and other broadband stakeholders. b. Collaboration with the authority, communications service providers, and employers to identify, develop, and market broadband packages available in the political subdivision. c. Familiarity with broadband mapping tools and other state-level resources. d. Maintaining regular communication with the authority. e. Providing to the political subdivision regular reports regarding the availability of broadband in the political subdivision. 24.5(3) Evaluation. The authority will evaluate whether the applicant demonstrates that its efforts or proposed efforts to develop broadband infrastructure and access to broadband will have a sufficient impact that warrants certification.

261—24.6(15E) Telecommuter forward certification. 24.6(1) A political subdivision that meets the criteria for broadband forward certification in rule 261—24.5(15E) may apply for telecommuter forward certification. To obtain telecommuter forward certification, a political subdivision shall submit to the authority an application indicating the following: a. The political subdivision’s support and commitment to promote the availability of telecommuting options. b. Existing or proposed ordinances encouraging the further development of telecommuting options. c. Efforts to secure local funding for the further development of telecommuting options. d. A single point of contact for coordinating telecommuting opportunities and options. 24.6(2) The single point of contact designated pursuant to paragraph 24.6(1)“d” shall be responsible for all of the following: a. Coordination and partnership with the authority, communications service providers, realtors, economic development professionals, employers, employees, and other telecommuting stakeholders. b. Collaboration with the authority, communications service providers, and employers to identify, develop, and market telecommuter-capable broadband packages available in the political subdivision. c. Promotion of telecommuter-friendly workspaces, such as business incubators with telecommuting spaces, if such a workspace has been established in the political subdivision at the time the political subdivision submits the application. d. Familiarity with broadband mapping tools and other state-level resources. e. Maintaining regular communication with the authority. f. Providing to the political subdivision regular reports regarding the availability of telecommuting options in the political subdivision. 24.6(3) Evaluation. The authority will evaluate whether the applicant demonstrates that its efforts or proposed efforts to further develop and promote the availability of telecommuting will have a sufficient impact that warrants certification.

261—24.7(15E) Maintenance of certification. 24.7(1) Reports. A political subdivision certified pursuant to this chapter shall submit an annual report to the authority verifying its continued eligibility for certification pursuant to rule 261—24.5(15E) or 261—24.6(15E). If applicable, the report will also address a political subdivision’s compliance with the restrictions in subrule 24.7(2). 24.7(2) Restrictions on certified broadband forward communities. A political subdivision that the authority has certified as a broadband forward community pursuant to subrule 24.4(3) shall not do any of the following: a. Require an applicant to designate a final contractor to complete a broadband infrastructure project. b. Impose a fee to review an application or issue a permit for a broadband infrastructure application in excess of $100. c. Impose a moratorium of any kind on the approval of applications and issuance of permits for broadband infrastructure projects or on construction related to broadband infrastructure. d. Discriminate among communications service providers or public utilities with respect to any action described in this rule or otherwise related to broadband infrastructure, including granting access to public rights-of-way, infrastructure and poles, river and bridge crossings, or any other physical assets owned or controlled by the political subdivision. e. As a condition for approving an application or issuing a permit for a broadband infrastructure project or for any other purpose, require the applicant to provide any service or make available any part of the broadband infrastructure to the political subdivision or make any payment to or on behalf of the political subdivision, except for the fee allowed under paragraph 24.7(2)“b.” 24.7(3) Revocation of certification. The authority shall revoke the certification of a political subdivision that does not comply with the requirements of subrule 24.7(1) or 24.7(2) or that the authority otherwise determines is no longer eligible for certification pursuant to this chapter. These rules are intended to implement Iowa Code section 15E.167 as enacted by 2021 Iowa Acts, House File 871.ARC 5908CEconomic Development Authority[261]Notice of Intended Action

Proposing rule making related to Hoover presidential library tax credit and providing an opportunity for public comment

The Economic Development Authority hereby proposes to adopt Chapter 43, “Hoover Presidential Library Tax Credit,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 15.106A and 2021 Iowa Acts, House File 588.State or Federal Law Implemented This rule making implements, in whole or in part, 2021 Iowa Acts, House File 588.Purpose and Summary Pursuant to 2021 Iowa Acts, House File 588, the Authority will develop a system for authorization of tax credits and will control the distribution of tax credits for donations to the Hoover Presidential Library Foundation for its library and museum renovation project fund. The tax credit created by House File 588 is allowed against specific taxes for tax years beginning on or after January 1, 2021, but before January 1, 2024. The aggregate amount of tax credits authorized is $5 million. These proposed rules implement the legislation.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Authority for a waiver of the discretionary provisions, if any, pursuant to 261—Chapter 199. Public Comment Any interested person may submit written or oral comments concerning this proposed rule making. Written or oral comments in response to this rule making must be received by the Authority no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making action is proposed:

ITEM 1. Adopt the following new 261—Chapter 43: CHAPTER 43HOOVER PRESIDENTIAL LIBRARY TAX CREDIT

261—43.1(15E) Purpose. The purpose of the Hoover presidential library tax credit is to encourage donations to the Hoover presidential foundation for the Hoover presidential library and museum renovation project.

261—43.2(15E) Definitions. "Authority" means the economic development authority created in Iowa Code section 15.105. "Department" means the Iowa department of revenue. "Donor" means a person who makes an unconditional charitable donation to the Hoover presidential foundation for the Hoover presidential library and museum renovation project fund. "Tax credit" means the amount a taxpayer may claim against the taxes imposed in Iowa Code chapter 422, subchapters II, III, and V, and in Iowa Code chapter 432, and against the moneys and credits tax imposed in Iowa Code section 533.329.

261—43.3(15E) Authorization of tax credits. 43.3(1) For tax years beginning on or after January 1, 2021, but before January 1, 2024, a tax credit shall be allowed against the taxes imposed in Iowa Code chapter 422, subchapters II, III, and V, and in Iowa Code chapter 432, and against the moneys and credits tax imposed in Iowa Code section 533.329, equal to 25 percent of a donor’s charitable donation made on or after July 1, 2021, to the Hoover presidential foundation for the Hoover presidential library and museum renovation project fund. 43.3(2) A donor shall not claim a tax credit for a donation made during a tax year beginning before January 1, 2021, or after December 31, 2023. 43.3(3) To receive the tax credit, a donor shall file a claim with the department in accordance with any applicable administrative rules adopted by the department.

261—43.4(15E) Tax credit limitations. 43.4(1) The aggregate amount of tax credits authorized for the program shall not exceed a total of $5 million. 43.4(2) The maximum amount of tax credits granted to any one person shall not exceed $250,000. 43.4(3) Ten percent of the aggregate amount of tax credits authorized, or $500,000, shall be reserved for those donations in amounts of $30,000 or less. If any portion of the reserved tax credits has not been distributed by September 1, 2023, the remaining reserved tax credits shall be available after September 1, 2023, to any other eligible person.

261—43.5(15E) Distribution process and review criteria. 43.5(1) The authority shall develop and make available a standardized application pertaining to the authorization and distribution of tax credits. The application shall request information to document that a qualified donation has been made, and any other information required by the authority. Qualifying donors shall be issued a tax credit certificate to be included with the donor’s Iowa tax return. 43.5(2) Applications will be accepted and awarded on an ongoing basis. 43.5(3) If, before September 1, 2023, the authority receives tax credit applications in excess of $4.5 million for donations greater than $30,000, the authority shall establish a waitlist to receive any portion of the reserved tax credits that are not distributed by September 1, 2023. Applications on the waitlist shall be prioritized by the date the authority received the applications. If any portion of the reserved tax credits under subrule 43.4(3) becomes available after September 1, 2023, the authority shall approve the waitlisted applications and issue tax credit certificates in the order they are listed on the waitlist, up to the amount of the remaining reserved tax credits. Placement on a waitlist does not constitute a promise binding the state that persons placed on the waitlist will actually receive a tax credit in a future year. The availability of a tax credit and approval of a tax credit application in a future year is contingent upon the availability of tax credits in that particular year. These rules are intended to implement Iowa Code section 15E.364 as enacted by 2021 Iowa Acts, House File 588.ARC 5909CEconomic Development Authority[261]Notice of Intended Action

Proposing rule making related to workforce housing tax incentives program and providing an opportunity for public comment

The Economic Development Authority hereby proposes to amend Chapter 48, “Workforce Housing Tax Incentives Program,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 15.106A and 2021 Iowa Acts, Senate File 619.State or Federal Law Implemented This rule making implements, in whole or in part, 2021 Iowa Acts, Senate File 619.Purpose and Summary 2021 Iowa Acts, Senate File 619, amends Iowa Code section 15.354 relating to the Workforce Housing Tax Incentives Program. The legislation (1) replaces examination language with a requirement that recipients provide a statement of the amount of final qualified rehabilitation expenditures and any other information deemed necessary by the Authority, (2) allows the Authority to request additional documentation before approving a sales and use tax refund, (3) allows the Authority to establish an application period for the submission of disaster recovery applications and allows for competitive scoring, and (4) adds a provision that a housing business shall meet the requirements set forth in the Authority’s and the Department of Revenue’s rules before claiming a refund of sales and use taxes. This proposed rule making amends certain definitions, incorporates the examination language from Senate File 619 and further elaborates on the attestation procedure, and amends the disaster recovery housing rules to include the authority to establish an application period and a competitive process. The proposed rule making also updates the Authority’s address.Fiscal Impact This rule making has no fiscal impact to the State of Iowa.Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Authority for a waiver of the discretionary provisions, if any, pursuant to 261—Chapter 199.Public Comment Any interested person may submit written or oral comments concerning this proposed rule making. Written or oral comments in response to this rule making must be received by the Authority no later than 4:30 p.m. on October 12, 2021. Comments should be directed to:Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend rule 261—48.3(15), definition of “Costs directly related,” as follows: "Costs directly related" means expenditures that are incurred for construction of a housing project to the extent that they are attributable directly to the improvement of the property or its structures. “Costs directly related” includes expenditures for property acquisition, site preparation work, surveying, construction materials, construction labor, architectural services,and engineering services, building permits, building inspection fees, and interest accrued on a construction loan during the time period allowed for project completion under an agreement entered into pursuant to the program. “Costs directly related” does not include expenditures forproperty acquisition, building permits, building inspection fees, furnishings, appliances, accounting services, legal services, loan origination and other financing costsincluding interest on construction loans, syndication fees and related costs, developer fees, or the costs associated with selling or renting the dwelling units whether incurred before or after completion of the housing project.

ITEM 2. Adopt the following new definition of “Project completion” in rule 261—48.3(15): "Project completion" means the same as defined in Iowa Code section 15.355(2).

ITEM 3. Amend paragraphs 48.5(3)"d" and 48.5(3)"e" as follows: d. Upon completion of a housing project, ana housing business shall submit all of the following to the authority: (1) Anexamination of the project in accordance with the American Institute of Certified Public Accountants’ statements on standards for attestation engagements, completed by a certified public accountant(CPA) authorized to practice in this state, shall be submitted to the authority.The attestation applicable to this examination is SSAE No. 10 (as amended by SSAE Nos. 11, 12, 14), AT section 101 and AT section 601. The procedures used by the CPA to conduct the examination should allow the CPA to conclude that, in the CPA’s professional judgment, the expenditures claimed are eligible pursuant to the agreement; Iowa Code chapter 15, subchapter II, part 17; and all rules adopted pursuant to Iowa Code chapter 15, subchapter II, part 17, in all material respects. Within ten business days of a request by the authority, the housing business shall make available to the authority the documents reviewed by the CPA unless good cause is shown. (2) A statement of the final amount of qualifying new investment for the housing project. (3) Any information the authority deems necessary to ensure compliance with the agreement signed by the housing business pursuant to paragraph 48.5(3)“a”; the requirements of Iowa Code chapter 15, subchapter II, part 17; and these rules and rules adopted by the department of revenue pursuant to Iowa Code section 15.356. e. Upon review of the examination, and verification of the amount of the qualifying new investment,and review of any other information submitted pursuant to subparagraph 48.5(3)“d”(3), the authority may notify the housing business of the amount that the housing business may claim as a refund of the sales and use taxes under subrule 48.6(2) and may issue a tax credit certificate to the housing business stating the amount of workforce housing investment tax credits under rule 261—48.6(15) that the eligible housing business may claim. The sum of the amount that the housing business may claim as a refund of the sales and use tax and the amount of the tax credit certificate shall not exceed the amount of the tax incentive award.

ITEM 4. Amend paragraph 48.6(3)"b" as follows: b. The tax credit shall be allowed against the taxes imposed in Iowa Code chapter 422, divisionssubchapters II, III, and V, and in Iowa Code chapter 432, and against the moneys and credits tax imposed in Iowa Code section 533.329.

ITEM 5. Amend subparagraphs 48.6(3)"e" and 48.6(3)"e" as follows: (3) The tax credit certificate, unless rescinded by the authority, shall be accepted by the department of revenue as payment for taxes imposed pursuant to Iowa Code chapter 422, divisionssubchapters II, III, and V, and in Iowa Code chapter 432, and for the moneys and credits tax imposed in Iowa Code section 533.329, subject to any conditions or restrictions placed by the authority upon the face of the tax credit certificate and subject to the limitations of this program. (6) A tax credit shall not be claimed by a transferee under this rule until a replacement tax credit certificate identifying the transferee as the proper holder has been issued. The transferee may use the amount of the tax credit transferred against the taxes imposed in Iowa Code chapter 422, divisionssubchapters II, III, and V, and in Iowa Code chapter 432, and against the moneys and credits tax imposed in Iowa Code section 533.329, for any tax year the original transferor could have claimed the tax credit. Any consideration received for the transfer of the tax credit shall not be included as income under Iowa Code chapter 422, divisionssubchapters II, III, and V. Any consideration paid for the transfer of the tax credit shall not be deducted from income under Iowa Code chapter 422, divisionssubchapters II, III, and V.

ITEM 6. Amend subrule 48.8(1) as follows: 48.8(1) The authority will develop a standardized application and make the application available to eligible housing businesses and to communities. To apply for assistance under the program, an interested person shall submit an application to the authority. Applications must be submitted online at www.iowagrants.gov. Instructions for application submission may be obtained at www.iowagrants.gov or by contacting the Community Development Division, Economic Development Authority, 200 East Grand Avenue1963 Bell Avenue, Suite 200, Des Moines, Iowa 5030950315.

ITEM 7. Amend paragraph 48.10(1)"a" as follows: a. A housing business seeking disaster recovery housing tax incentives pursuant to rule 261—48.11(15) shall make application to the authority in the manner prescribed in this rule. The authority may accept applications on a continuous basis and will review applications in the order receivedestablish a disaster recovery application period following the declaration of a major disaster by the President of the United States for a county in Iowa. The authority will acknowledge receipt of the application andreview applications in a timely manner. The authority will notify the applicant within 30 days as to whether theapplicants in writing of a tax incentive award for a disaster recovery housing project will be awarded tax incentives pursuant to this rule.

ITEM 8. Amend paragraph 48.10(2)"a" as follows: a. Upon review of the applicationand scoring of all applications received during a disaster recovery application period, the authority may make a tax incentive award to a disaster recovery housing project under the disaster recovery housing program. The tax incentive award shall represent the maximum amount of tax incentives that the disaster recovery housing project may qualify for under the program. In determining a tax incentive award, the authority shall not use an amount of project costs that exceeds the amount included in the application of the housing business. Tax incentive awards shall be approved by the director of the authority.

ITEM 9. Amend paragraphs 48.10(3)"d" and 48.10(3)"e" as follows: d. Upon completion of a disaster recovery housing project, ana housing business shall submit all of the following to the authority: (1) Anexamination of the project in accordance with the American Institute of Certified Public Accountants’ statements on standards for attestation engagements, completed by a certified public accountant(CPA) authorized to practice in this state, shall be submitted to the authority.The attestation applicable to this examination is SSAE No. 10 (as amended by SSAE Nos. 11, 12, 14), AT section 101 and AT section 601. The procedures used by the CPA to conduct the examination should allow the CPA to conclude that, in the CPA’s professional judgment, the expenditures claimed are eligible pursuant to the agreement, Iowa Code chapter 15, subchapter II, part 17; and all rules adopted pursuant to Iowa Code chapter 15, subchapter II, part 17, in all material respects. Within ten business days of a request by the authority, the housing business shall make available to the authority the documents reviewed by the CPA unless good cause is shown. (2) A statement of the final amount of qualifying new investment for the housing project. (3) Any information the authority deems necessary to ensure compliance with the agreement signed by the housing business pursuant to paragraph 48.10(3)“a”; the requirements of Iowa Code chapter 15, subchapter II, part 17; and these rules and rules adopted by the department of revenue pursuant to Iowa Code section 15.356. e. Upon review of the examination as described in paragraph 48.10(3)“d,” and verification of the amount of the qualifying new investment,and review of any other information submitted pursuant to subparagraph 48.10(3)“d”(3), the authority may notify the housing business of the amount that the housing business may claim as a refund of the sales and use tax under Iowa Code section 15.355(2), and may issue a tax credit certificate to the housing business stating the amount of disaster recovery housing investment tax credits under rule 261—48.11(15) that the eligible housing business may claim. The sum of the amount that the housing business may claim as a refund of the sales and use tax and the amount of the tax credit certificate shall not exceed the amount of the tax incentive award.

ITEM 10. Amend paragraph 48.11(3)"b" as follows: b. The tax credit shall be allowed against the taxes imposed in Iowa Code chapter 422, divisionssubchapters II, III, and V, and in Iowa Code chapter 432, and against the moneys and credits tax imposed in Iowa Code section 533.329.

ITEM 11. Amend subparagraphs 48.11(3)"e" and 48.11(3)"e" as follows: (3) The tax credit certificate, unless rescinded by the authority, shall be accepted by the department of revenue as payment for taxes imposed pursuant to Iowa Code chapter 422, divisionssubchapters II, III, and V, and to Iowa Code chapter 432, and against the moneys and credits tax imposed pursuant to Iowa Code section 533.329, subject to any conditions or restrictions placed by the authority upon the face of the tax credit certificate and subject to the limitations of this program. (6) A tax credit shall not be claimed by a transferee under this rule until a replacement tax credit certificate identifying the transferee as the proper holder has been issued. The transferee may use the amount of the tax credit transferred against the taxes imposed pursuant to Iowa Code chapter 422, divisionssubchapters II, III, and V, and in Iowa Code chapter 432, and against the moneys and credits tax imposed in Iowa Code section 533.329, for any tax year the original transferor could have claimed the tax credit. Any consideration received for the transfer of the tax credit shall not be included as income under Iowa Code chapter 422, divisionssubchapters II, III, and V. Any consideration paid for the transfer of the tax credit shall not be deducted from income under Iowa Code chapter 422, divisionssubchapters II, III, and V.

ITEM 12. Amend rule 261—48.12(15) as follows:

261—48.12(15) Program funding allocation and management of excess demand. The authority shall allocate $10 million to disaster recovery housing tax incentives pursuant to rules 261—48.9(15) to 261—48.13(15). In allocating tax credits pursuant to Iowa Code section 15.119(5), as enacted by 2019 Iowa Acts, House File 772, for the period beginning July 1, 2019, and ending June 30, 2024, the authority shall not allocate more than $10 million for purposes of Iowa Code section 15.119(5). 48.12(2) The authority shall issue tax incentives under the program for disaster recovery housing projects on a first-come, first-served basis until the maximum amount of tax incentives allocated under Iowa Code section 15.119(5) is reached. 48.12(3) The authority will administer a wait list for disaster recovery housing projects in accordance with Iowa Code section 15.354(6)“d.”

ITEM 13. Amend subrule 48.13(1) as follows: 48.13(1) The authority will develop a standardized application and make the application available to eligible housing businesses and to communities. To apply for assistance under the disaster recovery housing program, an interested person shall submit an application to the authority. Applications must be submitted online at www.iowagrants.gov. Instructions for application submission may be obtained at www.iowagrants.gov or by contacting the Community Development Division, Economic Development Authority, 200 East Grand Avenue1963 Bell Avenue, Suite 200, Des Moines, Iowa 50309.

ITEM 14. Amend 261—Chapter 48, implementation sentence, as follows: These rules are intended to implement Iowa Code sectionsections 15.351 to 15.356as amended by 2021 Iowa Acts, Senate File 619.ARC 5920CInspections and Appeals Department[481]Notice of Intended Action

Proposing rule making related to evaluation of tenants in assisted living programs and providing an opportunity for public comment

The Inspections and Appeals Department hereby proposes to amend Chapter 69, “Assisted Living Programs,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 231C.3(1).State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 231C.3(1).Purpose and Summary The Iowa Board of Nursing revised its rules related to nursing practice for registered nurses/licensed practical nurses effective March 31, 2021 (ARC 5481C, IAB 9/9/21). The Iowa Board of Nursing clarified that an initial assessment of a patient shall only be provided by a registered nurse and shall not be provided by a licensed practical nurse via the delegation process. This proposed amendment to Chapter 69 removes the reference to “a licensed practical nurse via nurse delegation” from the list of professionals who may complete a tenant’s initial assessment to maintain consistency with the approved scope of practice for licensed practical nurses.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 481—Chapter 6.Public Comment Any interested person may submit written or oral comments concerning this proposed rule making. Written or oral comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Sara Throener Iowa Department of Inspections and Appeals Lucas State Office Building 321 East 12th Street Des Moines, Iowa 50319 Phone: 515.281.5457 Email: Sara.Throener@dia.iowa.gov Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making action is proposed:

ITEM 1. Amend subrule 69.22(1) as follows: 69.22(1) Evaluation prior to occupancy. A program shall evaluate each prospective tenant’s functional, cognitive and health status prior to the tenant’s signing the occupancy agreement and taking occupancy of a dwelling unit in order to determine the tenant’s eligibility for the program, including whether the services needed are available. The cognitive evaluation shall utilize a scored, objective tool. When the score from the cognitive evaluation indicates moderate cognitive decline and risk, the Global Deterioration Scale (GDS) shall be used at all subsequent intervals, if applicable. If the tenant subsequently returns to the tenant’s mildly cognitively impaired state, the program may discontinue the GDS and revert to a scored cognitive screening tool. The evaluation shall be conducted by a health care professional,or a human service professional, or a licensed practical nurse via nurse delegation.ARC 5925CPublic Health Department[641]Notice of Intended Action

Proposing rule making related to Iowa get screened (IGS): colorectal cancer program and providing an opportunity for public comment

The Public Health Department hereby proposes to amend Chapter 10, “Iowa Get Screened: Colorectal Cancer Program,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 135.11.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 135.11.Purpose and Summary The proposed amendments update screening eligibility requirements for the program to align with federal recommendations from the United States Preventive Services Task Force (USPSTF). These amendments will encourage access to services and align with a Centers for Disease Control and Prevention (CDC) cooperative agreement that is in year two of a five-year program. Additionally, language is proposed to be removed in order to allow for diagnostic services for eligible Iowans who had an initial positive screening test performed outside the program.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to the Department’s waiver provisions contained in 641—Chapter 178.Public Comment Any interested person may submit written comments concerning this proposed rule making. Written comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Victoria Brenton Department of Public Health 321 East 12th Street Des Moines, Iowa 50319 Email: victoria.brenton@idph.iowa.gov Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend rule 641—10.1(135) as follows:

641—10.1(135) Purpose. The Iowa get screened (IGS): colorectal cancer program is administered by the department. The goal of the IGS program is to reduce the incidence, mortality and prevalence of colorectal cancer in Iowa by increasing the number of men and women who receive colorectal cancer screenings. Through the program,colorectal cancer screenings, including but not limited to fecal immunochemical tests (FITs) and colonoscopies, are provided to eligible Iowans. Along with providing screenings, the program also facilitates supportive services and referral for diagnosis and treatment to Iowans with abnormal screening results. Iowans who are eligible to enter the program must be 5045 to 75 years of age, be underinsured or uninsured, have incomes of up to 300 percent of the federal poverty level (FPL) and have an average or increased risk for developing colorectal cancer.

ITEM 2. Adopt the following new definition of “Stool DNA (sDNA) test” in rule 641—10.2(135): "Stool DNA (sDNA) test" means a test that uses stool samples to detect abnormal DNA and small amounts of blood shed into the stool from colon cancer or colon polyps.

ITEM 3. Amend paragraphs 10.3(2)"a" and 10.3(2)"b" as follows: a. The IGS program provides reimbursement for the following screening tests, procedures, preparations and tissue analyses when those services are provided by a participating health care provider who has a provider agreement with the IGS program. Payment is based on Medicare Part B participating provider rates (Title XIX). (1) Fecal immunochemical tests annually; (2) Colonoscopy every 10ten years from initial screen or as prescribed by a physician in accordance with USPSTF recommendations; (3) Biopsy/polypectomy during a colonoscopy; (4) Bowel preparation; (5) Moderate sedation for colonoscopy; (6) One office visit related to IGS program-covered colorectal cancer tests; (7) One office visit related to colorectal cancer follow-up diagnostic test results; (8) Total colon examination with either colonoscopy (preferred) or double contrast barium enema if medically prescribed by doctor; (9) Pathology services.; (10) CT colonography (or virtual colonoscopy) as recommended by provider; (11) Stool DNA (sDNA) test every three years; (12) Care or services for complications that result from screening or diagnostic tests provided by the IGS program at the discretion of the department and based on the availability of funds. b. The IGS program does not provide reimbursement for the following: (1) Screening tests requested at intervals sooner than recommended by the USPSTF; (2) CT colonography (or virtual colonoscopy) as a primary screening test; (3) (2) Computed tomography scans (CT or CAT scans) requested for staging or other purposes; (4) (3) Surgery or surgical staging; (5) (4) Any treatment related to the diagnosis of colorectal cancer; (6) Any care or services for complications that result from screening or diagnostic tests provided by the IGS program; (7) (5) Medical evaluation of symptoms that make individuals at high risk for CRC; (8) Diagnostic services for participants who had an initial positive screening test performed outside of the program; (9) (6) Management and testing (e.g., surveillance colonoscopies and medical therapy) for medical conditions, including inflammatory bowel disease, ulcerative colitis or Crohn’s disease; (10) (7) Genetic testing for participants who present with a history suggestive of a hereditary nonpolyposis colorectal cancer (HNPCC) or familial adenomatous polyposis (FAP);and (11) Use of propofol as anesthesia during endoscopy, unless specifically required and approved by the IGS program in cases where the participant cannot be sedated with standard moderate sedation; and (12) (8) Treatment for colorectal cancer.

ITEM 4. Amend paragraph 10.3(3)"c" as follows: c. If the enrolled participant has an abnormal colorectal cancer screening test, the health care provider or local coordinator shall provide to the participant a comprehensive referral directing the participant to appropriate additional diagnostic or treatment services. When the results of a FIT screenscreening test are positive, the local coordinator shall work with the participant and enrolled health care provider to schedule a colonoscopy.

ITEM 5. Renumber rules 641—10.5(135) to 641—10.9(135) as 641—10.4(135) to 641—10.8(135).

ITEM 6. Amend renumbered subrule 10.4(1) as follows: 10.4(1) Age. Individuals 5045 through 75 years of age shall be the target population to receive colorectal cancer screening.

ITEM 7. Amend renumbered subrule 10.4(6) as follows: 10.4(6) Ineligible. The IGS program does not provide coverage for: a. Individuals with Medicare Part B coverage. b. Individuals 4944 years of age and younger. c. Individuals 76 years of age and older. d. Individuals who do not have a primary care provider. e. Individuals at high risk for developing colorectal cancer. Individuals at high risk include: (1) A genetic diagnosis of familial adenomatous polyposis (FAP) or hereditary nonpolyposis colorectal cancer (HNPCC), (2) A clinical diagnosis or suspicion of FAP or HNPCC, or (3) A history of inflammatory bowel disease (ulcerative colitis or Crohn’s disease). f. Individuals experiencing the following gastrointestinal symptoms: (1) Rectal bleeding, bloody diarrhea, or very dark blood in the stool within the past six months; (2) Prolonged change in bowel habits; (3) Persistent/ongoing abdominal pain; (4) Recurring symptoms of bowel obstruction; or (5) Significant unintentional weight loss.

ITEM 8. Amend renumbered paragraph 10.5(1)"b" as follows: b. Upon enrollment, the participant shall be eligible for services for 12 months beginning from the date of enrollment, subject to restrictions in funding and program coverage as provided in subrules 10.6(2)10.5(2), 10.6(3)10.5(3) and 10.7(1)10.6(1).

ITEM 9. Amend relettered paragraph 10.5(3)"b" as follows: b. No longer meets the criteria set forth in rule 641—10.5(135)641—10.4(135);

ITEM 10. Amend renumbered subrule 10.6(2) as follows: 10.6(2) In the event that the financial demand abates, the program director shall withdraw the financial shortfall certification, at which time the individual shall be eligible for program services in accordance with rule 641—10.5(135)641—10.4(135).ARC 5926CPublic Health Department[641]Notice of Intended Action

Proposing rule making related to adoption records and providing an opportunity for public comment

The Public Health Department hereby proposes to amend Chapter 95, “Vital Records: General Administration,” and Chapter 99, “Vital Records Modifications,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 144.3.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 144 and 2021 Iowa Acts, House File 855.Purpose and Summary 2021 Iowa Acts, House File 855, adds provisions to Iowa Code chapter 144 to allow an adult adoptee to obtain a noncertified copy of the adoptee’s original certificate of birth and provides biological parents the ability to complete a contact preference form and medical history form. The proposed amendments implement these changes.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to the Department’s waiver provisions contained in 641—Chapter 178.Public Comment Any interested person may submit written comments concerning this proposed rule making. Written comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to:Melissa Bird Department of Public Health 321 East 12th Street Des Moines, Iowa 50319 Email: melissa.bird@idph.iowa.gov Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend subrule 95.6(1) as follows: 95.6(1) Fees for services provided by state registrar or county registrar. The following fees shall be charged and remitted for the various services provided by the state registrar or the county registrar. a. The state registrar or county registrar, as applicable, shall charge a fee of $20$15 for a certified copy of a vital record. If, following a search, no record is found and no certified copy is printed, the $20$15 fee may be retained. On and after July 1, 2019, this fee will revert to $15. b. The state registrar shall charge a fee of $20$15 to prepare an adoption certificate, to amend a certificate, to amend a certificate of live birth to reflect a legal change of name, to prepare a delayed certificate, to process other administrative or legal actions,prepare a noncertified copy of an original certificate of birth pursuant to Iowa Code section 144.24A as enacted by 2021 Iowa Acts, House File 855, section 2, or for preparation ofprepare copies of supporting documents on file in the state registrar’s office. On and after July 1, 2019, this fee will revert to $15. No fee shall be charged for establishment of paternity. c. The state registrar shall charge a fee of $25 to file a completed application for the mutual consent voluntary adoption registry. d. The state registrar shall charge a fee of $5 to update applicant information maintained in the mutual consent voluntary adoption registry and the declaration of paternity registry. e. The state registrar shall charge a fee of $20$15 to amend an abstract or other legal documentation in support of the preparation of a new certificate. On and after July 1, 2019, this fee will revert to $15. f. The state registrar shall charge a fee of $35 to issue a commemorative copy of a certificate of birth or a certificate of marriage pursuant to Iowa Code section 144.45A. Fees collected shall be deposited in the emergency medical services fund established in Iowa Code section 135.25. g. The state registrar shall charge a fee of $20$15 for the purpose of issuing an uncertified copy of a certificate of birth resulting in stillbirth pursuant to Iowa Code section 144.31A. On and after July 1, 2019, this fee will revert to $15.

ITEM 2. Amend subrule 95.6(4) as follows: 95.6(4) Search of county registrar’s records—fee for uncertified copy. A person who is requesting an uncertified copy of avital record in the custody of the county registrar shall conduct the search of the county files to locate the record. If a copy is requested, the county registrar may charge a fee of no more than $5 for an uncertified copy of the county recordpursuant to Iowa Code section 22.3. The fee shall be retained by the county.

ITEM 3. Amend paragraph 95.6(5)"a" as follows: a. All fees collected by the county registrar and the state registrar shall be distributed as follows: (1) For fees collected by a county registrar, with the exception of the fee in subrule 95.6(4), the county registrar shall retain $4 of each $20$15 fee collected by that office. On and after July 1, 2019, this $20 fee will revert to $15. Fees collected shall be divided as follows:

For a birth certificate or a marriage certificate, the state registrar shall receive $13$8, and $3 shall be deposited in the general fund of the state, except for the fee collected pursuant to paragraph 95.6(1)“f.” On and after July 1, 2019, the amount received by the state registrar will revert to $8.
For a death certificate, the state registrar shall receive $11$6, the office of the state medical examiner shall receive $3, and $2 shall be deposited in the general fund of the state. On and after July 1, 2019, the amount received by the state registrar will revert to $6.

(2) For fees collected by the state registrar, the state registrar shall retain all fees, with the exception of the fees in paragraph 95.6(1)“a,” of which the state registrar shall retain $14$9 of each $20$15 fee collected for the issuance of certified copies. On and after July 1, 2019, the fee collected will revert to $15 and the amount retained by the state registrar will revert to $9. The $6 balance of certified copy fees collected by the state registrar shall be divided as follows:

For a birth certificate or a marriage certificate, $6 shall be deposited in the general fund of the state.
For a death certificate, the office of the state medical examiner shall receive $3, and $3 shall be deposited in the general fund of the state.

ITEM 4. Renumber rules 641—95.14(144) to 641—95.16(144) as 641—95.15(144) to 641—95.17(144).

ITEM 5. Adopt the following new rule 641—95.14(144):

641—95.14(144) Access to original certificate of birth prior to adoption. Notwithstanding any provision of law to the contrary, an adopted person who was born in this state and whose original certificate of birth was substituted with a new certificate of birth pursuant to Iowa Code section 144.24 based upon the adoption, or an entitled person, may apply for and obtain a noncertified copy of the original certificate of birth of the adopted person who is the subject of the original certificate of birth in accordance with this rule, including with any required redaction of personally identifiable information pursuant to Iowa Code section 144.24A(2) as enacted by 2021 Iowa Acts, House File 855, section 2. 95.14(1) Entitlement. a. If an adopted person who is the subject of the original certificate of birth is submitting the application, the adopted person shall be at least 18 years of age at the time the application is filed. b. If an entitled person is submitting the application, the adopted person who is the subject of the original certificate of birth shall be deceased at the time the application is filed. 95.14(2) The adopted person or the entitled person requesting a noncertified copy of the original certificate of birth shall file a written application with the state registrar on a form and in the manner prescribed by the state registrar. 95.14(3) Upon receipt of the written application, proof of identification pursuant to paragraph 95.9(3)“a,” and payment of a fee pursuant to paragraph 95.6(1)“b,” the state registrar shall issue a noncertified copy of the original certificate of birth to the applicant in accordance with this rule, including with any required redaction of personally identifiable information pursuant to Iowa Code section 144.24A(2) as enacted by 2021 Iowa Acts, House File 855, section 2. At the time of such issuance, the state registrar shall also provide to the applicant any contact preference form or medical history form completed and submitted to the state registrar including with any required redaction of personally identifiable information pursuant to Iowa Code section 144.24A(2) as enacted by 2021 Iowa Acts, House File 855, section 2. a. A biological parent may file a contact preference form prescribed by the state registrar in accordance with the provisions outlined in Iowa Code section 144.24A(2) as enacted by 2021 Iowa Acts, House File 855, section 2, and state the biological parent’s preference for contact by an adopted person or an entitled person following application for and issuance of the noncertified copy of the original certificate of birth under this rule. The contact preference form shall be provided to the biological parent in accordance with Iowa Code section 600A.4 as amended by 2021 Iowa Acts, House File 855, section 5. A contact preference form may be completed or updated by the biological parent at any time at the request of the biological parent. b. A biological parent may file a medical history form prescribed by the state registrar in accordance with the provisions outlined in Iowa Code section 144.24A(3) as enacted by 2021 Iowa Acts, House File 855, section 2, and provide medical history of the biological parent and any blood relatives. The medical history form shall be provided to the biological parent in accordance with Iowa Code section 600A.4 as amended by 2021 Iowa Acts, House File 855, section 5. A medical history form may be completed or updated by the biological parent at any time at the request of the biological parent. c. Upon receipt of a completed contact preference form or medical history form, the state registrar shall attach any such completed form to the original certificate of birth. d. For the purposes of this rule, “entitled person” means the spouse of the adopted person who is deceased or an adult related to the adopted person who is deceased within the second degree of consanguinity. e. An application may be submitted under this rule by an adopted person or an entitled person to obtain a noncertified copy of an adopted person’s original certificate of birth in accordance with this rule, if the adopted person who is the subject of the original certificate of birth was born before January 1, 1971. f. Beginning January 1, 2022, an application may be submitted under this rule by an adopted person or an entitled person to obtain a noncertified copy of an adopted person’s original certificate of birth in accordance with this rule, notwithstanding the date of birth of the adopted person who is the subject of the original certificate of birth prescribed under paragraph 95.14(3)“b.” This rule is intended to implement 2021 Iowa Acts, House File 855.

ITEM 6. Adopt the following new subrule 99.13(3): 99.13(3) The clerk of the court shall, within 30 days of issuance, deliver one certified copy of any adoption decree, and any contact preference form or medical history form associated with the certified copy of any adoption decree for the purposes of Iowa Code section 144.24A as enacted by 2021 Iowa Acts, House File 855, section 2, and fee pursuant to rule 641—95.6(144) to the state registrar of vital statistics to prepare a certificate of birth as prescribed in Iowa Code section 144.19.

ITEM 7. Amend subrule 99.14(4) as follows: 99.14(4) The county registrar and state registrar shall seal the original certificate of live birth. The state registrar shall place the original certificate of live birth and all related adoption information in a sealed file, and the file shall not be opened and inspected except by the state registrar for administrative purposes or upon an order from a court of competent jurisdiction pursuant to Iowa Code section 144.24or as provided in Iowa Code section 144.24A as enacted by 2021 Iowa Acts, House File 855, section 2.ARC 5927CPublic Health Department[641]Notice of Intended Action

Proposing rule making related to medical residency program liability costs and providing an opportunity for public comment

The Public Health Department hereby proposes to amend Chapter 108, “Medical Residency Training State Matching Grants Program,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 135.176 and 2021 Iowa Acts, House File 891.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 135.176 and 2021 Iowa Acts, House File 891.Purpose and Summary 2021 Iowa Acts, House File 891, division XVII, designates an additional activity that can be funded from the Medical Residency Training Matching Grants Program for the time period beginning July 1, 2021, and ending June 30, 2026. Sponsors that are not covered under Iowa Code chapter 669 may apply to the program to fund the payment by the sponsor of medical residency program liability costs subject to provision by the sponsor of dollar-for-dollar matching funds used for the payment of such costs. The proposed amendments to Chapter 108 implement these changes to Iowa Code section 135.176.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to the Department’s waiver provisions contained in 641—Chapter 178.Public Comment Any interested person may submit written comments concerning this proposed rule making. Written comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Susan Dixon Department of Public Health 321 East 12th Street Des Moines, Iowa 50319 Email: susan.dixon@idph.iowa.gov Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend rule 641—108.1(135) as follows:

641—108.1(135) Scope and purpose. The medical residency training state matching grants program is established to provide greater access to health care by increasing the number of practicing physicians in Iowa through the expansion of residency positions in Iowa. The department shall provide funding to sponsors of accredited graduate medical education residency programs for the establishment, expansion, or support of medical residency training programs that will increase the number of residents trained.For the period beginning July 1, 2021, and ending June 30, 2026, the department shall provide funding to sponsors of accredited medical education residency programs for the support of medical residency training program liability costs. Funding for the program may be provided through the health care workforce shortage fund, medical residency training account, and is specifically dedicated to the medical residency training state matching grants program as established in Iowa Code section 135.176. These rules shall be implemented only to the extent funding is available.

ITEM 2. Amend rule 641—108.3(135) as follows:

641—108.3(135) Eligibility criteria—establishment or expansion. To be eligible for a matching grantfor the establishment or expansion of medical residency training programs, a sponsor shall satisfy the following requirements and qualifications: 108.3(1) A sponsor shall be financially and organizationally responsible for a residency training program that is accredited by the ACGME or by the AOA. 108.3(2) A sponsor shall demonstrate through documented financial information that funds have been budgeted and will be expended by the sponsor in the amount required to provide matching funds for each residency proposed in the request for state matching funds. A sponsor shall document this requirement by providing with its request a line-item budget showing sponsor funding amounts and state matching funds requested. 108.3(3) A sponsor shall demonstrate a need for such residency program in the state by providing with its request for state matching funds objective evidence of such need including: a. Workforce data, including state and federal workforce data and data from tracking databases; b. Population data, including community health needs assessments; c. Supply and demand data, including health professional shortage area designations; and d. Other related research including unique community- or state-level factors which establish a need for such residency program. 108.3(4) A sponsor shall submit with its request for state matching funds a recruitment and retention plan to encourage residents to enter practice in Iowa with a preference for health professional shortage areas and to demonstrate over time the impact on Iowa’s workforce. 108.3(5) A sponsor shall offer persons to whom a primary care residency position is awarded the opportunity to participate in a rural rotation to expose the resident to the rural areas of the state.

ITEM 3. Renumber rules 641—108.4(135) and 641—108.5(135) as 641—108.5(135) and 641—108.6(135).

ITEM 4. Adopt the following new rule 641—108.4(135):

641—108.4(135) Eligibility criteria—support. To be eligible for a matching grant for the support of medical residency training program liability costs, a sponsor shall satisfy the following requirements and qualifications: 108.4(1) A sponsor shall be financially and organizationally responsible for a residency training program that is accredited by the ACGME or by the AOA. 108.4(2) A sponsor shall not be subject to Iowa Code chapter 669. 108.4(3) A sponsor shall demonstrate through documented financial information that funds have been budgeted and will be expended by the sponsor in the amount required to provide dollar-for-dollar matching funds for the cost of the medical residency program liability. 108.4(4) A sponsor shall demonstrate that the funding of the medical residency program liability costs falls within the period of July 1, 2021, and June 30, 2026.

ITEM 5. Amend renumbered rules 641—108.5(135) and 641—108.6(135) as follows:

641—108.5(135) Amount of grant. 108.5(1) The department shall award funds based upon the funds budgeted as demonstrated in the request, as identified in subrule 108.3(2)or 108.4(3). 108.5(2) Grant award per activity. a. The total amount of a grant awarded to a sponsor proposing the establishment of a new or alternative campus accredited medical residency training program shall be limited to no more than 100 percent of the amount of funds the sponsor has budgeted as demonstrated through a line-item budget for each residency sponsored for the purpose of the residency program. b. The total amount of a grant awarded to a sponsor proposing the provision of a new residency position within an existing accredited medical residency or fellowship training program, or a sponsor funding residency positions which are in excess of the federal residency cap, shall be limited to no more than 25 percent of the amount of funds the sponsor has budgeted as demonstrated through a line-item budget for each residency position sponsored for the purpose of the residency program. c. The total amount of a grant awarded to a sponsor proposing to fund medical residency program liability costs shall be limited to no more than 50 percent of the total cost the sponsor has budgeted as demonstrated through a line-item budget for the medical residency program liability costs. 108.5(3) A sponsor shall receive funds based on budgeted expenses that include but are not limited to: a. Stipends and fringe benefits for residents and fellows; b. The portion of teaching physician salaries and fringe benefits associated with teaching and supervision of residents and fellows; c. Other direct costs that can be attributed to medical education (e.g., clerical salaries, telephone, office supplies). 108.5(4) An individual sponsor that establishes a new or alternative campus accredited medical residency training program shall not receive more than 50 percent of the state matching funds available each year to support the program. An individual sponsor proposing the provision of a new residency position within an existing accredited medical residency or fellowship training program, or a sponsor funding residency positions which are in excess of the federal residency cap,or the funding of the payment by the sponsor of medical residency program liability costs subject to provision by the sponsor of dollar-for-dollar matching funds used for payment of such costs shall not receive more than 25 percent of the state matching funds available each year to support the program.

641—108.6(135) Application and review process. 108.6(1) The department shall follow requirements for competitive selection contained in 641—Chapter 176 in awarding these funds. 108.6(2) The department shall establish a request for proposal process for sponsors eligible to receive funding. The request for proposal and review process and review criteria for preference in awarding the grants shall be described in the request for proposal, including preference in the residency specialty and preference for candidates who are residents of Iowa, attended and earned an undergraduate degree from an Iowa college or university, or attended and earned a medical degree from a medical school in Iowa. The residency specialty preference may be reflective of a subspecialty where particular demands for services have been demonstrated, of geographic areas of preference, or of other particular preferences that advance the objectives of the program. 108.6(3) Each request for proposal issued by the department will identify one or more of the following purposes for use of the funding: a. The establishment of new or alternative campus accredited medical residency training programs; b. The provision of new residency positions within existing accredited medical residency or fellowship training programs; or c. The funding of residency positions which are in excess of the federal residency cap.; or d. The funding of the payment by the sponsor of medical residency program liability costs subject to provision by the sponsor of dollar-for-dollar matching funds used for the payment of such costs for the period beginning July 1, 2021, and ending June 30, 2026. The funding shall not apply to medical residency programs to which Iowa Code chapter 669 applies. 108.6(4) An applicant may appeal the denial of a properly submitted request for proposal. Appeals shall be governed by rule 641—176.8(135,17A).ARC 5928CPublic Health Department[641]Notice of Intended Action

Proposing rule making related to emergency medical services training program and providing an opportunity for public comment

The Public Health Department hereby proposes to amend Chapter 139, “Emergency Medical Services—Training Programs—Students—Complaints and Investigations,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code chapter 147A.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 147A and 2021 Iowa Acts, Senate File 615.Purpose and Summary These proposed amendments implement the provisions of 2021 Iowa Acts, Senate File 615, that allow a medical care ambulance service or nontransport service that has received authorization from the Department to conduct emergency medical care service training.Fiscal Impact This rule making has no fiscal impact to the State of Iowa.Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to the Department’s waiver provisions contained in 641—Chapter 178.Public Comment Any interested person may submit written comments concerning this proposed rule making. Written comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Rebecca Curtiss Department of Public Health 321 East 12th Street Des Moines, Iowa 50319 Email: rebecca.curtiss@idph.iowa.gov Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend rule 641—139.2(147A), definition of “EMS training program,” as follows: "EMS training program" "training program" means an Iowa college approved by the Higher Learning Commission, or an Iowa hospital authorized by the department, or a service program that has received authorization from the department to conduct emergency medical care training.

ITEM 2. Amend paragraph 139.4(1)"a" as follows: a. Have a sponsoring institution that is accredited by the Higher Learning Commission or its equivalent, that is recognized by the United States Department of Education as an approved Iowa college, or that is an Iowa licensed hospital that is approved by the departmenthas received authorization from the department to conduct emergency medical care services training.ARC 5918CPublic Safety Department[661]Amended Notice of Intended Action

Providing for a public hearing on rule making related to electrical installations

The Notice of Intended Action published in the Iowa Administrative Bulletin on August 11, 2021, as ARC 5838C proposes to amend Chapter 504, “Standards for Electrical Work,” Iowa Administrative Code. In order to receive oral comments concerning ARC 5838C, the Electrical Examining Board hereby gives notice that a public hearing will be held as follows: October 21, 2021 10 to 11 a.m. First Floor Public Conference Room 125 Oran Pape State Office Building Des Moines, Iowa Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rule making. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 103.6(1).State or Federal Law Implemented This rule making implements, in whole or in part, 2021 Iowa Acts, House File 871, section 25.Purpose and Summary The proposed rule making removes the January 1, 2022, expiration date in rule 661—504.1(103) and brings that rule into alignment with 2021 Iowa Acts, House File 871, section 25. The rule making provides consistency and predictability regarding the rules applicable to electrical installations in Iowa by clarifying that the amendments in rule 661—504.1(103) will remain in effect until the Board issues additional rule making in response to any changes to the National Electrical Code, 2020 edition. The Board wishes to hold a public hearing on this matter during one of its regular meetings in order to allow interested parties the opportunity to comment publicly, which requires additional time. No changes have been made from the original Notice.Fiscal Impact, Jobs Impact, Waivers Statements related to the fiscal impact, jobs impact, and waiver of this rule making may be found in the preamble of ARC 5838C.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

ARC 5919CState Public Defender[493]Notice of Intended Action

Proposing rule making related to claims and fees for indigent adoption services and providing an opportunity for public comment

The State Public Defender hereby proposes to amend Chapter 12, “Claims for Indigent Defense Services,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 13B.4.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapters 13B and 815 and 2021 Iowa Acts, House Files 743 and 861.Purpose and Summary These proposed amendments are intended to implement the procedure for submission of claims by attorneys appointed to represent an indigent party who files an adoption petition to adopt a child who was the subject of a termination of parental rights proceeding pursuant to Iowa Code chapter 232. The amendments also set the attorney fee limitations for the number of hours of attorney time which may be claimed for those services without securing a court order to exceed the maximum number of hours. These proposed amendments are in response to the enactment of 2021 Iowa Acts, House File 743. Also, the amendments conform the administrative rules of the Office of the State Public Defender to the enactment of 2021 Iowa Acts, House File 861, section 24, which provides a $3-per-hour across-the-board increase in the hourly rates paid to private attorneys who accept court appointments to represent indigent clients.Fiscal Impact Legislative enactment of the $3-per-hour rate increase is estimated to increase annual costs to the Indigent Defense Fund by approximately $1,500,000 beginning FY 2022. In addition, the enactment by the Legislature of House File 743, providing for court-appointed attorneys for indigent adoptive parents of a child who has been subject to a termination of parental rights under Iowa Code chapter 232, is likely to result in an additional charge to the Indigent Defense Fund in the amount of $660 to $1,320 per adoption, but the number of adoptions that will be of the type covered by House File 743 is unknown.Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Office of the State Public Defender for a waiver of the discretionary provisions, if any, pursuant to 493—Chapter 6. Public Comment Any interested person may submit written comments concerning this proposed rule making. Written comments in response to this rule making must be received by the Office no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Kurt Swaim Office of the State Public Defender Lucas State Office Building 321 East 12th Street Des Moines, Iowa 50319 Email: kswaim@spd.state.ia.us Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend subrule 12.1(1) as follows: 12.1(1) The state public defender will pay from the indigent defense fund attorney fees and costs for the following types of cases: commitment of sexually violent predators under Iowa Code chapter 229A; contempts; postconviction relief proceedings to the extent authorized under Iowa Code chapter 822; juvenile justice under Iowa Code section 232.141(3)(c); guardians ad litem for children in juvenile court under Iowa Code chapter 600 or respondents under Iowa Code chapter 600A;filing by an indigent party of an adoption petition under Iowa Code section 600.3 to adopt a child who was the subject of a termination of parental rights proceeding under Iowa Code chapter 232; fees for appellate attorneys under Iowa Code section 814.11; fees to attorneys under Iowa Code section 815.7; fees for court-appointed counsel under Iowa Code section 815.10; violation of probation or parole under Iowa Code chapter 908; indigent’s right to transcript on appeal under Iowa Code section 814.9; indigent’s application for transcript in other cases under Iowa Code section 814.10; and special witnesses for indigents under Iowa Code section 815.4.

ITEM 2. Amend subrule 12.4(1) as follows: 12.4(1) Unless the attorney has a contract that provides for a different manner or rate of payment, the following hourly rates shall apply to payment of all claims for cases to which the attorney was appointed after June 30, 1999, and before July 1, 2006:Attorney time:Class A felonies$60/hourClass B felonies$55/hourAll other criminal cases$50/hourAll other cases$50/hourParalegal time:$25/hourUnless the attorney has a contract that provides for a different manner or rate of payment, the following hourly rates shall apply to payment of all claims for cases to which the attorney was appointed after June 30, 2006, and before July 1, 2007:Attorney time:Class A felonies$65/hourAll other criminal cases$60/hourAll other cases$55/hourParalegal time:$25/hourUnless the attorney has a contract that provides for a different manner or rate of payment, the following hourly rates shall apply to payment of all claims for cases to which the attorney was appointed after June 30, 2007, and before July 1, 2019:Attorney time:Class A felonies$70/hourClass B felonies$65/hourAll other criminal cases$60/hourAll other cases$60/hourParalegal time:$25/hourUnless the attorney has a contract that provides for a different manner or rate of payment, the following hourly rates shall apply to payment of all claims for cases to which the attorney was appointed after June 30, 2019, and before July 1, 2021:Attorney time:Class A felonies$73/hourClass B felonies$68/hourAll other criminal cases$63/hourAll other cases$63/hourParalegal time:$25/hourUnless the attorney has a contract that provides for a different manner or rate of payment, the following hourly rates shall apply to payment of all claims for cases to which the attorney was appointed after June 30, 2021:Attorney time:Class A felonies$76/hourClass B felonies$71/hourAll other criminal cases$66/hourAll other cases$66/hourParalegal time:$25/hour

ITEM 3. Amend subrule 12.6(2) as follows: 12.6(2) Juvenile cases. The state public defender establishes attorney fee limitations for the number of hours of attorney time that may be claimed for the following categories of juvenileand adoption cases:Delinquency (through disposition) 20Child in need of assistance (CINA) (through disposition) 20Termination of parental rights (TPR) (through disposition) 30Juvenile court review and other postdispositional court hearings 5Judicial bypass hearings 3Juvenile commitment hearings 3Juvenile petition on appeal 10Motion for further review after petition on appeal 5Representation of adopting party in adoption following Iowa 5Code chapter 232, termination of parental rightsNothing in this subrule is intended to in any manner diminish, increase, or modify the state public defender’s authority to review any and all claims for services as authorized by the Iowa Code.The fee limitations are applied separately to each case, as that term is defined in rule 493—7.1(13B,815).For example, in a juvenile proceeding in which the attorney represents a parent whose four children are the subject of four child in need of assistance petitions, if the court handles all four petitions at the same time or the incident that gave rise to the child in need of assistance action is essentially the same for each child, the fee limitation for the attorney representing the parent is 20 hours for all four proceedings, not 20 hours for each one.For a child in need of assistance case that becomes a termination of parental rights case, the fee limitations shall apply to each case separately. For example, the attorney could claim up to 20 hours for the child in need of assistance case and up to 30 hours for the termination of parental rights case.In a delinquency case, if the child has multiple petitions alleging delinquency and the court handles the petitions at the same time, the fee limitation for the proceeding is the fee limitation for one delinquency.In a juvenile case in which a petition on appeal is filed, the appointed trial attorney does not need to obtain a new appointment order to pursue a petition on appeal. The claim, through the filing of a petition on appeal, must be submitted on a Juvenile form. If an appellate court orders full briefing, the attorney fee claim for services subsequent to an order requiring full briefing must be submitted on an Appellate form and is subject to the rules governing appeals.ARC 5921CTransportation Department[761]Notice of Intended Action

Proposing rule making related to driver’s privacy protection and motor vehicle records and providing an opportunity for public comment

The Transportation Department hereby proposes to amend Chapter 4, “Public Records and Fair Information Practices,” to adopt new Chapter 301, “Driver’s Privacy Protection—Motor Vehicle Records” and to rescind Chapter 415, “Driver’s Privacy Protection—Certificates of Title and Vehicle Registration,” Chapter 610, “Release of Computerized Driver’s License and Nonoperator’s Identification Card Records,” and Chapter 611, “Driver’s Privacy Protection—Driver’s License and Nonoperator’s Identification Card,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 307.12, 321.11 and 321A.3.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 321.10, 321.11, 321.13 and 321A.3 and 18 U.S.C. Section 2721 et seq.Purpose and Summary This proposed rule making adopts new Chapter 301, which combines content from current Chapters 415, 610 and 611, related to motor vehicle records and the federal Driver’s Privacy Protection Act of 1994 (DPPA). The purpose of creating this new chapter is to join chapters with similar content and reduce the number of places an interested party would need to check to determine the privacy requirements related to personal information contained in motor vehicle records protected under the DPPA. Along with the adoption of new Chapter 301, the three current Chapters 415, 610 and 611 will be rescinded and Chapter 4 will be amended to refer to Chapter 301. In addition to simply combining content from three separate chapters into one chapter, this proposed rule making updates the rules to align with existing legal authority and Department practice and eliminates outdated or irrelevant requirements or options. The following paragraphs further explain the proposed amendments: Applicability. The rule concerning applicability states that the chapter applies to personal information contained in motor vehicle records, which is covered under the DPPA and Chapter 301. Definitions. The definitions rule combines definitions from Chapters 415, 610 and 611. No new definitions have been added. Motor vehicle records access. The proposed amendments outline the requirements and procedures implementing the DPPA and Iowa Code section 321.11 as these requirements pertain to accessing motor vehicle records. Specifically, the rules outline the process for accessing a motor vehicle record containing personal information depending on if the requester is seeking a motor vehicle record that contains personal information about another individual, or if the requester is seeking information from the requester’s own motor vehicle records, or if the requester is a law enforcement agency. The rule states that the Department shall not release any personal information if requested by vehicle license plate number or validation sticker number, except as provided in Iowa Code section 321.11. The rules also provide that all requesters who obtain personal information from the Department are required to comply with the provisions of Iowa Code section 321.11 and the DPPA. Electronic motor vehicle records. The Department has the ability to create an electronic file of motor vehicle records for authorized requesters under the DPPA, and the rule provides that the Department may either require the privacy act form to be completed or the Department may enter into a memorandum of understanding governing the terms of accessing motor vehicle records electronically. Certified driving record abstracts. A certified abstract of a driving record contains information on the face of an individual’s driver’s license in addition to information regarding the individual’s driver’s license sanctions, reportable motor vehicle accidents, and convictions. A certified abstract of a driving record is often used in court proceedings or for other official purposes. Personal information in a certified abstract of a driving record may only be released if the requester completes and submits the applicable privacy act agreement form, provides any required proof of identity and authority to secure access to the information, and pays any applicable statutory fee. The rule also includes application provisions for law enforcement agencies or a person seeking the person’s own record.Fiscal Impact This rule making has no fiscal impact to the State of Iowa because the Department is not adding any fees that are not already required by statute. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 761—Chapter 11. Public Comment Any interested person may submit written comments concerning this proposed rule making or may submit a written request to make an oral presentation at a public hearing. Written comments or requests to present oral comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Tracy George Department of Transportation DOT Rules Administrator, Government and Community Relations 800 Lincoln Way Ames, Iowa 50010 Email: tracy.george@iowadot.us Public Hearing If requested, a public hearing to hear oral presentations will be held on October 14, 2021, via conference call at 1 p.m. Persons who wish to participate in the conference call should contact Tracy George before 4:30 p.m. on October 12, 2021, to facilitate an orderly hearing. A conference call number will be provided to participants prior to the hearing. Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rule making. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact Tracy George, the Department’s rules administrator, and advise of specific needs. The public hearing will be canceled without further notice if no oral presentation is requested. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend paragraph 4.9(13)"a" as follows: a. Information other than personal information contained on electronic driver’s license or nonoperator’s identification card records that is provided by the licensee or card holder to the department for use by law enforcement, first responders, emergency medical service providers, and other medical personnel responding to or assisting with an emergency may be disclosed only as provided in Iowa Code sections 321.11 and 321.11A, 18 U.S.C. § 2721 et seq., and 761—Chapters 415, 610 and 611761—Chapter 301.

ITEM 2. Adopt the following new 761—Chapter 301: CHAPTER 301DRIVER’S PRIVACY PROTECTION—MOTOR VEHICLE RECORDS

761—301.1(321) Applicability. This chapter applies to personal information and highly restricted personal information in records pertaining to driver’s licenses, nonoperator’s identification cards, and personal information and highly restricted personal information about vehicle owners in records pertaining to certificates of title, registration receipts and registration renewal receipts issued by the department or a county treasurer. In addition to information on current licensees and cardholders, motor vehicle records include information on individuals who do not currently hold a driver’s license or nonoperator’s identification card, including, but not limited to, operating records and records of driver sanctions. This rule is intended to implement Iowa Code section 321.11 and 18 U.S.C. §2721 et seq.

761—301.2(321) Adoption. The department adopts the Driver’s Privacy Protection Act of 1994 (18 U.S.C. §2721 et seq.) for motor vehicle records. This rule is intended to implement Iowa Code section 321.11 and 18 U.S.C. §2721 et seq.

761—301.3(321) Definitions. "Certified abstract of operating record" means the same as described in Iowa Code section 321A.3(1). "Driver’s license" means the same as defined in Iowa Code section 321.1(20A). "Driver’s Privacy Protection Act" means the Act adopted in rule 761—301.2(321). "Highly restricted personal information" means an individual’s photograph or image, social security number, or medical or disability information. "Law enforcement agency" includes, but is not limited to, county attorneys, federal district attorneys, attorneys general, state and federal departments of justice, and a division or unit of a governmental agency if the division’s or unit’s primary responsibility is to prevent or detect crime or enforce criminal laws. "Motor vehicle record" as used in the Driver’s Privacy Protection Act means any record that pertains to a driver’s license, nonoperator’s identification card, certificate of title, registration receipt, or registration renewal receipt issued by the department or a county treasurer. "Person" means an individual, organization or entity. "Personal information" means information that identifies an individual, including the items listed in Iowa Code section 321.11 and 18 U.S.C. §2725 of the Driver’s Privacy Protection Act adopted in rule 761—301.2(321). “Personal information” also includes information on an individual’s nonoperator’s identification card. "Requester" means an individual, organization or entity that seeks from the department access to personal information or highly restricted personal information contained in the individual’s own or another individual’s motor vehicle record. A requester does not include an individual who is an authorized employee of the department or a county treasurer acting within the scope of the employee’s office or employment. "Sanction" means the same as defined in rule 761—615.1(321). "Vehicle owner" as used in this chapter means a vehicle owner who is an individual, not a company, organization or other legal entity. This rule is intended to implement Iowa Code section 321.11 and 18 U.S.C. §2721 et seq.

761—301.4(17A) Information and addresses. Information and forms for records pertaining to motor vehicle records may be obtained at any driver’s license service center or by mail from the Motor Vehicle Division, Iowa Department of Transportation, P.O. Box 9278, Des Moines, Iowa 50306-9278; in person at 6310 SE Convenience Blvd., Ankeny, Iowa; by telephone at (515)237-3110; by email at privacy.agreements@iowadot.us; or on the department’s website at www.iowadot.gov. This rule is intended to implement Iowa Code section 17A.3.

761—301.5(321) Requirements and procedures. Notwithstanding Iowa Code chapter 22 and 761—Chapter 4, the following procedures implement the Driver’s Privacy Protection Act and Iowa Code section 321.11 as the provisions pertain to access to records related to driver’s licenses, nonoperator’s identification cards, certificates of title, registration receipts and registration renewal receipts. The department does not provide the waiver procedure described in the Driver’s Privacy Protection Act (codified as 18 U.S.C. §2721(d)). 301.5(1) The department shall require a requester who requests personal information or highly restricted personal information about another individual to: a. Complete Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” and submit the form to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(17A). b. Provide proof of identity and authority to access the information by completing Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” and including a legible photocopy of the requester’s driver’s license or nonoperator’s identification card. c. Provide proof of authority to secure access to the personal information or highly restricted personal information by completing Part C of Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” and providing the department with proof of the requester’s status or other additional information the department may request. d. Complete the certification on Part D of Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” and provide any proof necessary to establish relevant facts. 301.5(2) The department shall require a law enforcement agency that requests personal information or highly restricted personal information about another individual to either follow the process in subrule 301.5(1) or complete and submit Form 431200, “Certified Motor Vehicle Record Request Form for Use by County Attorney’s Offices and Law Enforcement Agencies,” to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(321). Nothing in this subrule shall preclude a law enforcement agency from completing and submitting Form 431069 or from entering into a memorandum of understanding with the department for the purposes of requesting personal information or highly restricted personal information. 301.5(3) The department shall require a requester who requests personal information or highly restricted personal information about themselves to either: a. Complete and submit Part A of Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” including a photocopy of the requester’s driver’s license or nonoperator’s identification card to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(321). b. Provide valid proof of the requester’s identity to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(321). 301.5(4) Personal information and highly restricted personal information, except for an individual’s photograph or image, may be disclosed with the express written consent of the individual or vehicle owner to whom such information applies. When the requester has obtained the written consent of the individual or vehicle owner to whom the information applies, the requester must attach that written consent on a completed Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” and submit the form to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(321). An individual’s signature on the document providing express written consent allowing disclosure of the individual’s personal information to another person must be notarized, or in the alternative, the signed written consent document must be accompanied by a copy of the individual’s driver’s license or nonoperator’s identification card. 301.5(5) The statutory fee, if applicable, shall accompany the request for a motor vehicle record. 301.5(6) The department shall not release any personal information or highly restricted personal information if the request is made by plate number or validation sticker number, except as provided in Iowa Code section 321.11. 301.5(7) All requesters who obtain personal information or highly restricted personal information from the department are required to comply with Iowa Code section 321.11 and the Driver’s Privacy Protection Act. 301.5(8) The department may transmit records to an authorized requester under this chapter by email. This rule is intended to implement Iowa Code sections 321.10 and 321.11 and 18 U.S.C. §2721 et seq.

761—301.6(321) Electronic motor vehicle records files. Motor vehicle records files may be made available electronically to authorized requesters under the Driver’s Privacy Protection Act upon approval by the department and upon payment of any applicable fees. The department may require the requester to complete and submit Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” or Form 431200, “Certified Motor Vehicle Record Request Form for Use by County Attorney’s Offices and Law Enforcement Agencies,” to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(321), including any required attachments, or may enter into a memorandum of understanding governing the terms of accessing the motor vehicle records files electronically. This rule is intended to implement Iowa Code section 321.11 and 18 U.S.C. §2721 et seq.

761—301.7(321,321A) Certified abstract of operating records. 301.7(1) In accordance with Iowa Code section 321A.3, a certified abstract of the operating record of an individual is available. The record includes the information that is on the face of the individual’s driver’s license, plus information on the individual’s sanctions, reportable vehicle accidents, and convictions. The certified abstract of operating record does not include the individual’s photograph, social security number, or medical or disability information. 301.7(2) To obtain a certified abstract of an operating record of another individual, a requester shall complete Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” and submit the form to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(17A). Form 431069 must be completed with all required attachments before the department will process a request for a certified abstract of an operating record of another individual. A requester must attach a legible photocopy of the requester’s driver’s license or nonoperator’s identification card to the form. a. Personal information and highly restricted personal information protected by Iowa Code section 321.11 and the Driver’s Privacy Protection Act may be released only if all of the following apply: (1) The requester has complied with each of the following requirements: 1. Completed and submitted Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” including proof of authority to secure access to the personal information or highly restricted personal information. 2. Included all required attachments with the form, including a photocopy of the requester’s driver’s license or nonoperator’s identification card. 3. Paid the statutory fee by the methods permitted under Iowa Code section 321A.3, if applicable, for the requested record. (2) The department is satisfied with the genuineness, regularity, and legality of the application and in any statement made within the application and in any required attachments. b. Reserved. 301.7(3) The department shall require a law enforcement agency that requests a certified abstract of an operating record to complete to either follow the process in subrule 301.7(2) or submit Form 431200, “Certified Motor Vehicle Record Request Form for Use by County Attorney’s Offices and Law Enforcement Agencies,” to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(321). Nothing in this subrule shall preclude a law enforcement agency from completing and submitting Form 431069 or from entering into a memorandum of understanding with the department for the purposes of requesting information under this rule. 301.7(4) The department shall require a requester seeking the requester’s own operating record to either: a. Complete and submit Part A of Form 431069, “Privacy Act Agreement for Request of Motor Vehicle Records,” including a photocopy of the requester’s driver’s license or nonoperator’s identification card to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(321). b. Provide valid proof of the requester’s identity to any driver’s license service center or the motor vehicle division at the address in rule 761—301.4(321). 301.7(5) The statutory fee, if applicable, shall accompany the request for a certified abstract of the operating record. There is no fee for an individual to view the individual’s own operating record. Pursuant to the authority in Iowa Code section 321A.3, the department shall comply with the requirements of 781—Chapter 8 for payments accepted by credit card. 301.7(6) The single-use restriction in Iowa Code section 321A.3(8) applies only to the certified abstract of operating records and to persons who are subject to the fee listed in Iowa Code section 321A.3(1). 301.7(7) Any person who obtains a certified abstract of operating record from the department is required to comply with Iowa Code section 321.11 and the Driver’s Privacy Protection Act. This rule is intended to implement Iowa Code sections 321.11, 321.13 and 321A.3 and 18 U.S.C. §2721 et seq.

ITEM 3. Rescind and reserve 761—Chapter 415.

ITEM 4. Rescind and reserve 761—Chapter 610.

ITEM 5. Rescind and reserve 761—Chapter 611.ARC 5923CTransportation Department[761]Notice of Intended Action

Proposing rule making related to emergency interstate fleet permit and providing an opportunity for public comment

The Transportation Department hereby proposes to amend Chapter 511, “Special Permits for Operation and Movement of Vehicles and Loads of Excess Size and Weight,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 307.12 and chapter 321E as amended by 2021 Iowa Acts, House File 382.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 321E as amended by 2021 Iowa Acts, House File 382.Purpose and Summary This proposed rule making updates Chapter 511 to conform the rules with 2021 Iowa Acts, House File 382. House File 382 creates a new emergency interstate fleet permit, which will allow all vehicles operating under the same interstate or intrastate motor carrier number to travel under the same permit, provided all vehicles are carrying divisible loads of disaster relief supplies related to a presidentially declared national emergency that has been declared a major disaster under the federal Stafford Act. Prior to the legislative change, the Department was not authorized to issue one special permit to apply to multiple vehicles operating under the same motor carrier’s interstate or intrastate number. Rather, the Department’s only option was to issue vehicle-specific permits. The intent of the legislation was to reduce administrative burden for motor carriers responding to emergencies.Fiscal Impact This rule making has no fiscal impact to the State of Iowa beyond any impact anticipated by the legislation. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 761—Chapter 11.Public Comment Any interested person may submit written comments concerning this proposed rule making or may submit a written request to make an oral presentation at a public hearing. Written comments or requests to present oral comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Tracy George Department of Transportation DOT Rules Administrator, Government and Community Relations 800 Lincoln Way Ames, Iowa 50010 Email: tracy.george@iowadot.us Public Hearing If requested, a public hearing to hear oral presentations will be held on October 15, 2021, via conference call at 9 a.m. Persons who wish to participate in the conference call should contact Tracy George before 4:30 p.m. on October 12, 2021, to facilitate an orderly hearing. A conference call number will be provided to participants prior to the hearing. Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rule making. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact Tracy George, the Department’s rules administrator, and advise of specific needs. The public hearing will be canceled without further notice if no oral presentation is requested. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend rule 761—511.1(321E), definition of “Permit-issuing authority,” as follows: "Permit-issuing authority" means the:

Department’s vehicle and motor carrier services bureauvehicle division for permits for movement on the primary road system.
Authority responsible for the maintenance of a nonprimary system of highways or streets for permits for movement on that system. However, the vehicle and motor carrier services bureauvehicle division may issue single-trip permits on primary road extensions in cities in conjunction with movement on the rural primary road system.

ITEM 2. Adopt the following new definitions of “Emergency interstate permit” and “Stafford Act” in rule 761—511.1(321E): "Emergency interstate permit" means a permit issued under Iowa Code section 321E.29B as enacted by 2021 Iowa Acts, House File 382. "Stafford Act" means the Robert T. Stafford Disaster Relief and Emergency Assistance Act, Public Law No. 93-288, as amended, 42 U.S.C. §5121 et seq.

ITEM 3. Amend rule 761—511.1(321E), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 321E.9, 321E.15, 321E.26, 321E.29,321E.29B as enacted by 2021 Iowa Acts, House File 382, 321E.30 and 321E.34.

ITEM 4. Amend subrule 511.2(1) as follows: 511.2(1) Applications, forms, instructions and restrictions are available on the department’s website at www.iowadot.gov and by mail from the Vehicle and Motor Carrier Services BureauVehicle Division, Iowa Department of Transportation, P.O. Box 10382, Des Moines, Iowa 50306-0382; in person at 6310 SE Convenience Blvd., Ankeny, Iowa; by telephone at (515)237-3264; or by facsimile at (515)237-3257. Permits may be obtained electronically upon making application to the vehicle and motor carrier services bureauvehicle division.

ITEM 5. Amend subrule 511.2(4), introductory paragraph, as follows: 511.2(4) Except as provided in rule 761—511.15(321,321E)761—511.16(321,321E), permits may be issued only for the transporting of a single article which exceeds statutory size or weight limits or both, and which cannot reasonably be divided or reduced to statutory size and weight limits. However, permits may be issued for the transporting of property consisting of more than one article when:

ITEM 6. Amend rule 761—511.4(321E) as follows:

761—511.4(321E) Permits. Permits issued shall be in writing or in electronic format and may be either single-trip, multitrip, annual, annual oversize/overweight, annual raw forest products, compacted rubbish, emergency interstate permit or all-systems permits. 511.4(1) Methods of issuance. a. Permits for movement on the primary road system may be obtained in person, by facsimile, online, or by mail at the address in subrule 511.2(1). b. Reserved. 511.4(2) Forms. a. Applications for permits for movement on the primary road system shall be made online or in the form and manner prescribed by the department. b. Any applications to other permit-issuing authorities made upon department forms shall be sufficient and accepted as properly made by these authorities. c. Subject to the preceding paragraph, permit-issuing authorities may adopt, amend or modify these forms provided that the amended or modified forms adequately identify the applicant, the hauling vehicle and load, the manner and extent that the vehicle with load exceeds the statutory size and weight limits, the route, and the authorization of the issuing authority. However, the load for a multitrip permit does not have to be identified but the vehicle and load cannot exceed either the weight per axle or the total weight identified on the multitrip permit. Axle spacings cannot change. 511.4(3) Validity. a. Annual, annual oversize/overweight, annual raw forest products, compacted rubbish, and all-systems permits shall expire one year from the date of issuance. b. A single-trip permit shall be effective for five days. c. The validity of a multitrip permit shall not exceed 60 calendar days. d. Emergency interstate permits issued under Iowa Code section 321E.29B as enacted by 2021 Iowa Acts, House File 382, shall be effective for 30 calendar days. However, the permit shall not exceed the expiration of the applicable governor’s proclamation of disaster emergency issued under Iowa Code section 29C.6 in conjunction with the presidential declaration allowing interstate travel under the Stafford Act or the expiration of the declaration of major disaster under the Stafford Act, whichever expires first. 511.4(4) Duplicate permit. If a permit is lost or destroyed before it has expired, a duplicate permit may be issued at the discretion of the permit-issuing authority. The expiration date on the duplicate permit shall be the same as on the original permit. This rule is intended to implement Iowa Code sections 321E.2 and 321E.3and section 321E.29B as enacted by 2021 Iowa Acts, House File 382.

ITEM 7. Amend paragraph 511.6(1)"a" as follows: a. Public liability insurance in the amounts of $100,000 bodily injury each person, $200,000 bodily injury each occurrence, and $50,000 property damage with an expiration date to cover the tenure of the annual, annual oversize/overweight, annual raw forest products, all-systems, multitrip, emergency interstate or single-trip permit shall be required. In lieu of filing with the permit-issuing authority, a copy of the current certificate of public liability insurance in these amounts shall be carried in the vehicle for which the permit has been issued. Proof of liability insurance may be either in writing or in electronic format.

ITEM 8. Amend rule 761—511.6(321E), implementation sentence, as follows: This rule is intended to implement Iowa Code section 321E.13and section 321E.29B as enacted by 2021 Iowa Acts, House File 382.

ITEM 9. Amend rule 761—511.7(321,321E), introductory paragraph, as follows:

761—511.7(321,321E) Annual permits. Annual permits are issued for indivisible vehicles or indivisible loads for travel when the dimensions of the vehicle or load exceed statutory limits but the weight is within statutory limits. Routing is subject to embargoed bridges and roads and posted speed limits. The owner or operator shall select a route using the vertical clearance map and road construction and travel restrictions map provided by the department. Route, detour and road embargo information may be found online at www.511ia.orgor the department’s website for the embargo bridge maps. Annual permits are issued for the following:

ITEM 10. Strike “vehicle and motor carrier services bureau” wherever it appears in rules 761—511.7(321,321E) and 761—511.9(321,321E) and insert “motor vehicle division” in lieu thereof.

ITEM 11. Strike “See rule 761—511.14(321,321E)” wherever it appears in rules 761—511.7(321,321E), 761—511.8(321,321E), 761—511.9(321,321E), 761—511.12(321,321E) and 761—511.13(321,321E) and insert “See rule 761—511.15(321,321E)” in lieu thereof.

ITEM 12. Amend paragraph 511.8(1)"e" as follows: e. Routing.The owner or operator shall select a route using a vertical clearance map, bridge embargo map, pavement restrictions map, and construction and travel restrictions map provided by the department. Route, detour and road embargo information may be found online at www.511ia.orgor the department’s website for the embargo bridge maps.

ITEM 13. Renumber rules 761—511.14(321,321E) to 761—511.19(321) as 761—511.15(321,321E) to 761—511.20(321).

ITEM 14. Adopt the following new rule 761—511.14(29C,321,321E):

761—511.14(29C,321,321E) Emergency interstate permit. Emergency interstate permits are issued for vehicles transporting divisible loads of relief supplies when the weight exceeds statutory limits. Routing is subject to embargoed bridges and roads and posted speed limits. The owner or operator shall select a route using the vertical clearance map and road construction and travel restrictions map provided by the department. Route, detour, and road embargo information may be found online at www.511ia.org or the department’s website for the embargo bridge maps. The owner or operator must contact the appropriate local authority for route approval to determine if additional permits are necessary for county roads or city streets. Emergency interstate permits are issued for the following: 511.14(1) Vehicles with divisible loads of relief supplies, which may exceed the weight limits established under Iowa Code section 321.463 on the interstate highway system, provided the following are not exceeded: a. Width.Statutory: 8 feet 6 inches including appurtenances. b. Length.Limited to the maximum dimensions in Iowa Code section 321.457. c. Height.Statutory: 13 feet 6 inches. d. Weight.See rule 761—511.15(321,321E). e. Distance.Movement is allowed for unlimited distance on the interstate for 30 days not to exceed the expiration of the applicable governor’s proclamation issued in conjunction with the applicable declaration under the Stafford Act, or expiration of the applicable declaration under the Stafford Act, whichever expires sooner. In the event that more than one proclamation issued under Iowa Code section 29C.6 is in effect, only the proclamation issued in conjunction with the same event that caused the major disaster declaration under the Stafford Act shall govern the expiration date. Separate permits may be required for roads other than the interstate unless the governor, under the authority in Iowa Code section 29C.6, suspends applicable permitting provisions under proclamation for the same event. 511.14(2) Reserved. This rule is intended to implement Iowa Code sections 29C.6, 321.457, and 321.463 and section 321E.29B as enacted by 2021 Iowa Acts, House File 382.

ITEM 15. Amend renumbered rule 761—511.15(321,321E) as follows:

761—511.15(321,321E) Maximum axle weights and maximum gross weights for vehicles and loads moved under permit. 511.15(1) Annual and all-systems permits. a. For movement under an annual or all-systems permit, the axle weight and combined gross weight shall not exceed the limits found in Iowa Code section 321.463(3). b. See subrule 511.14(5)511.15(6) for exceptions for special mobile equipment. 511.15(2) Annual oversize/overweight permits or annual raw forest products permits. a. For movement under an annual oversize/overweight permit or an annual raw forest products permit, the gross weight on any axle shall not exceed 20,000 pounds, with a maximum of 156,000 pounds total gross weight. b. See subrule 511.14(5)511.15(6) for exceptions for special mobile equipment. 511.15(3) Multitrip permits. a. For movement under a multitrip permit, the gross weight on any axle shall not exceed 20,000 pounds with a maximum of 156,000 pounds total gross weight. b. See subrule 511.14(5)511.15(6) for exceptions for special mobile equipment. 511.15(4) Single-trip permits. a. For movement under a single-trip permit, the gross weight on any axle shall not exceed 20,000 pounds. b. If the combined gross weight exceeds 100,000 pounds, a single-trip permit may be issued for the movement only if the permit-issuing authority determines that it would not cause undue damage to the road and is in the best interest of the public. c. Cranes may have a maximum of 24,000 pounds per axle for movement under a single-trip permit. Routes must be reviewed by the permit-issuing authority prior to issuance. d. See subrule 511.14(5)511.15(6) for exceptions for special mobile equipment. 511.15(5) Emergency interstate permits. a. For movement under this permit, the gross weight on any axle shall not exceed 20,000 pounds with a maximum of 90,000 pounds total gross weight. b. The maximum weight on any single axle shall not exceed by more than 12.5 percent the maximum axle weight limit in the nonprimary highway maximum gross weight table in Iowa Code section 321.463(6)“b” and must comply with posted limits on roads and bridges. 511.(5) 511.15(6) Special mobile equipment. Special mobile equipment may have a gross weight of 36,000 pounds on any single axle equipped with minimum size 26.5-inch by 25-inch flotation pneumatic tires and a maximum gross weight of 20,000 pounds on any single axle equipped with minimum size 18-inch by 25-inch flotation pneumatic tires, provided that the total gross weight of the vehicle or a combination of vehicles does not exceed a maximum of 80,000 pounds for movement under an annual or all-systems permit and 126,000 pounds for movement under a single-trip, multitrip or annual oversize/overweight permit.For tire sizes and weights allowed between the maximum and minimum indicated, the following formula shall apply: Axle weight = 20,000 pounds + (tire width - 18) × 1,882 pounds. 511.(6) 511.15(7) Permitted tandem axle weights. a. Vehicles operating under an annual oversize permit, annual oversize/overweight permit, annual raw forest products permit, single-trip permit, or multitrip permit may have a gross weight not to exceed 46,000 pounds on a single-tandem axle of the truck tractor and a gross weight not to exceed 46,000 pounds on a single-tandem axle of the trailer or semitrailer if each axle of each tandem group has at least four tires. b. The maximum weight of any single axle within a permitted tandem axle group shall be 24,000 pounds. c. A permitted tandem axle shall not be a part of a larger group of axles whose centers are greater than 96 inches apart. This rule is intended to implement Iowa Code sections 321.463, 321E.7, 321E.8, 321E.9, 321E.9A, 321E.26, 321E.29B as enacted by 2021 Iowa Acts, House File 382, and 321E.32.

ITEM 16. Amend renumbered subrule 511.16(2) as follows: 511.16(2) At the discretion of the permit-issuing authority, the combined gross weight may exceed the statutory weight, but the axle weights shall be subject to rule 761—511.14(321,321E)761—511.15(321,321E).

ITEM 17. Amend renumbered rule 761—511.19(321,321E) as follows:

761—511.19(321,321E) Permit violations. Permit violations are to be reported to the permit-issuing authority by the arresting officer and the permit holder. If a permit holder is found to have willfully violated permit provisions, the vehicle and motor carrier services bureauvehicle division may, after notice and hearing, suspend, modify or revoke the permit privileges of the permit holder consistent with Iowa Code section 321E.20.If the permit that is suspended, modified, or revoked is an emergency interstate permit that is issued for a fleet operating under the permit holder’s interstate or intrastate motor carrier number, the department may issue emergency interstate permits to individual vehicles operating under the interstate or intrastate motor carrier number. This rule is intended to implement Iowa Code sections 321.492, 321E.16, and 321E.20and section 321E.29B as enacted by 2021 Iowa Acts, House File 382.

ITEM 18. Amend renumbered paragraph 511.20(1)"c" as follows: c. The department shall exercise due regard for the safety of the traveling public and the protection of the highway surfaces and structures when establishing an economic export corridor. Factors to be considered include ability of the proposed economic export corridor to safely accommodate combinations of vehicles described in subrule 511.19(2)511.20(2), taking into account physical configurations and restrictions and traffic demands and capacity, as well as connection to markets that will benefit from the established economic export corridor.

ITEM 19. Amend renumbered paragraph 511.20(2)"a" as follows: a. In addition to combinations of vehicles lawful for operation on roads or road segments not designated as an economic export corridor, the following combinations of vehicles may be operated on an economic export corridor designated under subrule 511.19(1)511.20(1) if the combinations of vehicles meet the requirements in paragraph 511.19(2)“b”511.20(2)“b”: (1) A truck tractor-semitrailer-semitrailer converted to a full trailer by use of a dolly equipped with a fifth wheel which is considered a part of the trailer for all purposes, and not a separate unit; or (2) A truck tractor-semitrailer-full trailer; or (3) A truck tractor-semitrailer-semitrailer combination, where the semitrailers are connected by a rigid frame extension including a fifth wheel connection point attached to the rear frame of the first semitrailer. ARC 5924CTransportation Department[761]Notice of Intended Action

Proposing rule making related to driver’s licenses, REAL ID documentation and driver’s knowledge tests and providing an opportunity for public comment

The Transportation Department hereby proposes to amend Chapter 601, “Application for License,” and Chapter 604, “License Examination,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 307.12 and 321.182.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 17A and sections 321.177, 321.182 and 321.186; H.R. 133, Division U, Title X, REAL ID Modernization Act; and 6 CFR Sections 37.11 and 37.13.Purpose and Summary This proposed rule making updates the driver’s license application and examination process within Chapters 601 and 604 and aligns with existing legal authority and Department practice. The proposed amendments incorporate existing legal authority from Iowa Code section 321.177 into the driver’s license application process relating to the Department’s responsibility to ensure a driver’s license holder is physically and mentally capable of operating a motor vehicle safely. The proposed amendments to subrule 601.5(2), regarding the verification of Social Security numbers, align this subrule with amendments made to the federal REAL ID Act of 2005 by the REAL ID Modernization Act (H.R. 133, Division U, Title X), which was signed into law on December 27, 2020. These changes to the federal law eased the burden on persons seeking to provide proof of their Social Security number for the purpose of obtaining a REAL ID. Prior to the federal law changes and this proposed amendment, a person could provide proof of the person’s Social Security number only from a small prescribed list of documents. However, now the federal law allows a person to simply provide the person’s Social Security number, which the Department is still required to verify through the Social Security Online Verification (SSOLV) system. The proposed amendments to subrule 601.5(5), relating to proof of a legal name change, remove barriers that certain customers have experienced when attempting to provide proof of a legal name change. The first change is to no longer require a court-ordered name change to contain the applicant’s date of birth. This is because a person’s date of birth is not always included in the court order, especially if that order is a divorce decree, and therefore this omission should not be a barrier to accepting a court order as a legal name change document. The second change is to ease the proof of legal name change process for existing Iowa licensees or cardholders whose name on their credential already matches their current legal name. This change incorporates guidance received from the U.S. Department of Homeland Security clarifying that an existing Iowa licensee or cardholder may prove a legal name change via confirmation from the SSOLV system pursuant to 6 CFR Section 37.13. This proposed rule making adds new subrule 601.5(8), which adopts the REAL ID exceptions process from federal regulation 6 CFR Section 37.11(h). This process deals with situations in which an applicant for a REAL ID driver’s license or nonoperator’s identification card is unable, because of reasons beyond the applicant’s control, to provide a necessary proof of identity and date of birth or proof of legal name change document in order to be issued a REAL ID-compliant credential. The federal REAL ID regulations provide that the Department must require an applicant to prove the applicant’s identity, date of birth, proof of name change and lawful status in the United States. The applicant can accomplish this by providing certain acceptable documents found in 6 CFR Section 37.11, and Iowa law mirrors the federal regulations. By adopting this new subrule, the Department will be able to provide a more streamlined exceptions process for applicants seeking a REAL ID credential, including allowing the Department to accept an I-94 document that was issued and verified by the U.S. Department of Homeland Security as proof of identity and date of birth for a refugee or asylee. Having a streamlined process will be especially important as the mandatory May 3, 2023, REAL ID compliance deadline approaches for persons wishing to board a commercial aircraft or enter a federal building. The proposed amendments also update Chapter 604, the license examination rules, to align with current Department practice of allowing the noncommercial driver’s license knowledge and driving test results to be valid for 180 days rather than 90 days. The proposed amendments also clarify the waiting periods for repeating a knowledge test and a driving test.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 761—Chapter 11. Public Comment Any interested person may submit written comments concerning this proposed rule making or may submit a written request to make an oral presentation at a public hearing. Written comments or requests to present oral comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Tracy George Department of Transportation DOT Rules Administrator, Government and Community Relations 800 Lincoln Way Ames, Iowa 50010 Email: tracy.george@iowadot.us Public Hearing If requested, a public hearing to hear oral presentations will be held on October 14, 2021, via conference call at 11 a.m. Persons who wish to participate in the conference call should contact Tracy George before 4:30 p.m. on October 12, 2021, to facilitate an orderly hearing. A conference call number will be provided to participants prior to the hearing. Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rule making. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact Tracy George, the Department’s rules administrator, and advise of specific needs. The public hearing will be canceled without further notice if no oral presentation is requested. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend subrule 601.1(4) as follows: 601.1(4) Disabilities. The applicant shall indicate and explain any mental or physical disabilities which might affect the applicant’s ability to operate a motor vehicle safely.The department may make further inquiries of the applicant or require further information necessary to determine whether it is safe to grant the applicant a driving privilege, including but not limited to requesting an examination authorized under Iowa Code section 321.186.

ITEM 2. Amend rule 761—601.1(321), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 321.13,321.177, 321.182,321.186, 321.196 and 321C.1,; Article V, the REAL ID Act of 2005 (49 U.S.C. Section 30301 note),; and 6 CFR Part 37.

ITEM 3. Amend rule 761—601.5(321) as follows:

761—601.5(321) Proofs submitted with application. A person who applies for a new Iowa driver’s license or nonoperator’s identification card, including a person who currently holds a license or card issued by another state or foreign jurisdiction, shall submit proof of identity, date of birth, social security number, Iowa residency and current residential address, and lawful status in the United States. 601.5(1) Verification of identity and date of birth. To establish identity and date of birth, an applicant must submit at least one of the following documents. The department may require additional documentation if the department believes that the documentation submitted is questionable or if the department has reason to believe that the person is not who the person claims to be. a. A valid, unexpired U.S. passport or U.S. passport card. b. A certified copy of a birth certificate and, if applicable, a certified amended or new birth certificate showing a change in name, date of birth, or sex, filed with a state office of vital statistics or equivalent agency in the applicant’s state of birth. The birth certificate must bear the issuing authority’s certification of authenticity. A hospital-issued certificate is not acceptable. As used herein, “state” means a state of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. c. A Consular Report of Birth Abroad issued by the U.S. Department of State (Form FS-240, DS-1350 or FS-545). d. A valid, unexpired Permanent Resident Card (Form I-551) issued by the U.S. Department of Homeland Security or U.S. Immigration and Naturalization Service. e. An unexpired employment authorization document issued by the U.S. Department of Homeland Security (Form I-766 or Form I-688B). f. An unexpired foreign passport with a U.S. visa affixed, accompanied by the approved I-94 form documenting the applicant’s most recent admittance into the United States. g. A Certificate of Naturalization issued by the U.S. Department of Homeland Security (Form N-550 or Form N-570). h. A Certificate of Citizenship (Form N-560 or Form N-561) issued by the U.S. Department of Homeland Security. i. A REAL ID driver’s license or identification card issued in compliance with the standards established by 6 CFR Part 37. j. Such other documents as the U.S. Department of Homeland Security may designate as acceptable proof of identity and date of birth for REAL ID purposes by notice published in the Federal Register. k. An Inmate Descriptor Inquiry, Client Information Inquiry or Offender Snapshot document issued by the Iowa department of corrections or the United States District Court, Northern and Southern Districts of Iowa. The document must contain the applicant’s full legal name and date of birth and be notarized. An applicant who provides only a document listed in this paragraph shall not be eligible for a driver’s license or nonoperator’s identification card marked as acceptable for federal purposes under 6 CFR Part 37. 601.5(2) Verification of social security number. a. Except as provided in paragraph 601.5(2)“b,” an applicant must presentproof of the applicant’s Social Security Administration’s account number card; or if a social security account number card is not available, the applicant may present any of the following documents bearing the applicant’s social security number:. (1) A W-2 form. (2) A Social Security Administration-1099 form. (3) A non-Social Security Administration-1099 form. (4) A pay stub with the applicant’s name and social security number on it. (5) An Internal Revenue Service Form 1095-A, 1095-B or 1095-C. b. An applicant who establishes identity by presenting the identity document listed in paragraph 601.5(1)“f” (unexpired foreign passport with a valid, unexpired U.S. visa affixedand accompanied by the approved I-94 form documenting the applicant’s most recent admittance into the United States) must documentpresent proof of the applicant’s social security number as set forth in paragraph 601.5(2)“a” or demonstrate non-work authorized status. 601.5(3) Verification of Iowa residency and current residential address. a. To document Iowa residency and current residential address, an applicant must present two documents that include the applicant’s name and current Iowa residential address and that demonstrate residency in the state of Iowa. Acceptable documents are documents issued by a person, organization, or entity other than the applicant, that include the issuer’s name and address, include the applicant’s name and current residential address, and demonstrate residency in the state of Iowa. The documents must be reasonable, authentic documents capable of verification by the department. b. The address must be a street or highway address, and may not be a post office box. In areas where a number and street name have not been assigned, an address convention used by the U.S. Postal Service is acceptable. The current residence of a person with more than one dwelling is the dwelling for which the person claims a homestead tax credit under Iowa Code chapter 425, if applicable. c. An applicant who is a member of the armed forces and is an Iowa resident stationed in another state may use the applicant’s address in the state of station as the applicant’s current residential address if the applicant does not maintain an Iowa residence during the applicant’s deployment outside the state of Iowa. The applicant must provide official documentation confirming the applicant’s residential address in the state of station and that the applicant is stationed in that state. The applicant’s mailing address may be the applicant’s current residential address or another address at which the applicant receives mail. d. An applicant who is a dependent family member of and resides with a member of the armed forces who is an Iowa resident stationed in another state may use the applicant’s address in the state of station as the applicant’s current residential address if the applicant does not maintain an Iowa residence during the applicant’s deployment outside the state of Iowa. The applicant must provide official documentation confirming the applicant’s residential address in the state of station and that the applicant is a dependent family member of a member of the armed forces stationed in that state. The applicant’s mailing address may be the applicant’s current residential address or another address at which the applicant receives mail. 601.5(4) Verification of lawful status in the United States. a. If an applicant presents one of the identity documents listed under subrule 601.5(1), the department’s verification of that identity document is satisfactory evidence of lawful status. b. An applicant who presents only a document listed under subrule 601.5(1), paragraph “e,” “f,” or “i,” is not eligible to receive a driver’s license or nonoperator’s identification card marked as REAL ID compliant unless the applicant also provides one of the other documents listed in subrule 601.5(1), or another United States Department of Homeland Security-approved document. 601.5(5) Verification of name change. The name listed on the driver’s license or nonoperator’s identification card that is issued shall be identical to the name listed on the identity document submitted unless the applicant submits the chain of legal documents necessary to show the legal change of the applicant’s name from the identity document submitted to the applicant’s current legal name.under paragraph 601.5(5)“a” or “b.” Alternatively, an applicant who is an existing Iowa licensee or cardholder may confirm the applicant’s current legal name as displayed on the applicant’s license or card under the requirements of paragraph 601.5(5)“c.” The following documents are acceptable: a. Court-ordered name change. A court order must contain the applicant’s prior legal name, the applicant’s court-ordered legal name, the applicant’s date of birth, and the court’s certification of authenticity. Acceptable court orders include orders under petition for name change, orders for name change set forth in a decree of dissolution, and orders for name change set forth in a decree of adoption. b. Certified copy of marriage certificate. The marriage certificate must be filed with a state office of vital statistics or equivalent agency in the person’s state or country of marriage. The certificate must bear the issuing authority’s certification of authenticity. A church, chapel or similarly issued certificate is not acceptable. As used herein, “state” means a state of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. c. Social security records match. The applicant must establish that the applicant’s Social Security Administration’s account number is issued in the applicant’s current legal name as verified by the department with the Social Security Online Verification (SSOLV) system in accordance with 6 CFR Section 37.13(b)(2). 601.5(6) Verification of change of date of birth. The date of birth listed on the driver’s license or nonoperator’s identification card that is issued shall be identical to the date of birth listed on the identity document submitted unless the applicant submits a certified amended or new birth certificate that documents the change of date of birth and that meets the requirements of paragraph 601.5(1)“b.” 601.5(7) Verification of change of sex designation. The sex designation listed on the driver’s license or nonoperator’s identification card that is issued shall be identical to the sex designation listed on the identity document submitted unless the applicant does one of the following: a. Applicants born in Iowa.An applicant born in Iowa must submit a certified amended or new Iowa birth certificate that documents the change of sex designation and that meets the requirements of paragraph 601.5(1)“b.” b. Applicants born outside of Iowa. (1) An applicant born outside of Iowa may document the change of sex designation by any of the following methods: 1. Submit a certified amended or new birth certificate from a state other than Iowa that documents the change of sex designation and that meets the requirements of paragraph 601.5(1)“b.” 2. Submit an amended or new Consular Report of Birth Abroad that documents the change of sex designation and meets the requirements of paragraph 601.5(1)“c.” 3. Submit an amended or new Certificate of Citizenship that documents the change of sex designation and meets the requirements of paragraph 601.5(1)“h.” 4. Submit a notarized affidavit from a physician and surgeon or osteopathic physician and surgeon that documents all of the following:

The physician and surgeon or osteopathic physician and surgeon completed sex designation treatment for the applicant.

A description of the medical procedures that constituted the treatment.

As a result of the treatment, the applicant’s sex designation was permanently changed by surgery or other treatment.

The physician and surgeon or osteopathic physician and surgeon’s full name, address, state of medical license, and medical license number.

(2) Pursuant to Iowa Code section 321.13, the department may make further investigation or require further information necessary to determine whether a change of sex designation occurred. c. Documentation.Documentation provided under this subrule shall be submitted to Driver and Identification Servicesthe Motor Vehicle Division, Iowa Department of Transportation, P.O. Box 9204, Des Moines, Iowa, 50306-9204. d. Name change.A change of sex designation shall not effect a name change unless the applicant verifies a name change pursuant to subrule 601.5(5). 601.5(8) Exception process. As provided in 6 CFR Section 37.11(h) (REAL ID exceptions process), and notwithstanding any other provisions of this chapter or 761—Chapter 11 to the contrary, an applicant who, for reasons beyond the applicant’s control, is unable to present a necessary document under this rule may apply to the department for an exception as provided in this subrule. a. To apply for an exception under this rule, an applicant shall do all of the following: (1) Submit an application to the department in a manner prescribed by the department. The application shall contain all of the following: 1. The applicant’s name, address, date of birth and contact information. 2. Whether the applicant is applying for a driver’s license or nonoperator’s identification card. 3. A description of the necessary verification of identity and date of birth or verification of name change documents under this rule that the applicant is unable to provide and the reason why it is beyond the applicant’s control to provide the document. 4. Any alternate document or other proof that exists to verify the facts contained in the missing document, which may include an approved I-94 form documenting the applicant’s most recent admittance into the United States as verified by the U.S. Department of Homeland Security in accordance with 6 CFR Section 37.13. 5. Any other information or proof required by the department. b. The motor vehicle division director or the director’s designee may grant an exception under this rule if all of the following apply: (1) The applicant has submitted an application with all of the required documentation under paragraph “a.” (2) The applicant, as determined by the department, has sufficiently demonstrated that the applicant is unable to provide a necessary document under this rule due to reasons beyond the applicant’s control. (3) The application of the subject rule will pose an undue hardship on the applicant, as determined by the department. (4) Granting the exception will not prejudice the substantial legal rights of any person, as determined by the department. c. The department may place any condition on an exception issued under this rule that the department finds necessary to carry out the department’s functions under the REAL ID Act of 2005 as amended by the REAL ID Modernization Act, H.R. 133, Division U, Title X. d. An exception under this subrule shall not apply to a required document under subrule 601.5(2). e. An alternate document accepted under this exception process to satisfy the requirements of subrule 601.5(4) is only allowed if the document demonstrates United States citizenship as required by 6 CFR Section 37.11(h). f. An applicant’s inability to pay for a necessary document under this rule does not meet the criteria for an exception under this subrule. g. Nothing in this subrule shall require the department to issue a driver’s license or nonoperator’s identification card if the applicant is not otherwise eligible for a license or card. The department reserves the right to modify or cancel an exception at any time if the department finds that anything in the exception application or accompanying documentation was based on fraud or misrepresentation by the applicant, or if the modification or cancellation is necessary based on a change in circumstances of the applicant. h. The application and documentation provided under this subrule shall be submitted to the Motor Vehicle Division, Iowa Department of Transportation, P.O. Box 9204, Des Moines, Iowa 50306-9204, or through electronic means determined by the department. The director of the motor vehicle division or the director’s designee may, in response to an application submitted under this subrule, grant or deny an application for exception in accordance with this subrule. i. An applicant whose application for exception under this rule has been denied may contest the decision in accordance with Iowa Code chapter 17A and 761—Chapter 13. The request for a hearing shall be submitted in writing to the motor vehicle division. The request shall include, as applicable, the applicant’s name, driver’s license or nonoperator’s identification number, date of birth, complete address and telephone number. The request must be submitted within 20 days after the date of the notice of exception denial. This rule is intended to implement Iowa Codechapter 17A and sections 321.13, 321.182 and 321.189,; the REAL ID Act of 2005 (49 U.S.C. Section 30301 note),as amended by the REAL ID Modernization Act, H.R. 133, Division U, Title X; and 6 CFR Part 37.

ITEM 4. Amend rule 761—604.20(321) as follows:

761—604.20(321) Knowledge test. 604.20(1) Written test. A knowledge test is a written test to determine an applicant’s ability to read and understand Iowa traffic laws and the highway signs that regulate, warn, and direct traffic. A test may be revised at any time but each test states the minimum passing score. 604.20(2) Three types of tests. There are three types of knowledge tests: an operator’s test, a chauffeur’s test, and a motorcycle test. The requirement for a license depends upon the class of license desired, applicable endorsements, and the qualifications of the applicant. 604.20(3) Oral test. An applicant who is unable to read or understand a written test may request an oral test. The oral test may be administered by an examiner or by an automated testing device. 604.20(4) Test score. The test score result is valid for 180 days. 604.(4) 604.20(5) Retesting. An applicant who fails a knowledge test may repeat the test at the discretion of the examiner, but at least one business day shall elapse between tests. This rule is intended to implement Iowa Code section 321.186.

ITEM 5. Amend subrule 604.30(3) as follows: 604.30(3) Test score. The examiner shall use the standard departmental score sheet and shall enter the test score and the licensing decision in the spaces provided. At the end of the test, the examiner shall explain the test score. The test score result is valid for 90180 days.

ITEM 6. Amend subrule 604.30(4) as follows: 604.30(4) Retesting. If anAn applicantwho fails a driving test,may repeat the test may be rescheduled at the discretion of the examiner.ARC 5922CTransportation Department[761]Notice of Intended Action

Proposing rule making related to parent-taught driver education and providing an opportunity for public comment

The Transportation Department hereby proposes to amend Chapter 634, “Driver Education,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 307.12 and 321.178A.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 321.178 and 321.178A; 2021 Iowa Acts, House File 380; and 2021 Iowa Acts, Senate File 546.Purpose and Summary This proposed rule making updates Chapter 634 to conform the rules with 2021 Iowa Acts, Senate File 546, sections 9 through 15, and 2021 Iowa Acts, House File 380, sections 1 and 2. Senate File 546 expands the parent-taught driver education program to any student currently attending a public school or accredited nonpublic school or who is receiving home school education under Iowa Code chapter 299A. Prior to the legislative change, only students receiving home school instruction were eligible for the parent-taught driver education program. These proposed amendments align with the legislative changes removing the requirement for an approved parent-taught driver education course to include 30 clock hours of classroom instruction and reducing the behind-the-wheel driving instruction time from 40 hours to 30 hours. The proposed amendments conform with the legislative changes eliminating the required number of hours and minutes of instruction an approved course must include on the topics of substance abuse, distracted driving, and railroad crossing safety, although each of those subject areas must still be included in an approved course. Finally, the proposed amendments adopt the legislative changes prohibiting the Department from requiring a preapproval or application process before a parent and student choose to begin a parent-taught driver education program. House File 380 adds distracted driving as a required topic of instruction for any driver education course, and the proposed amendments incorporate that new topic area into the rules. Most driver education courses already included instruction on distracted driving, but this legislative change ensures the topic will be covered by every instructor.Fiscal Impact This rule making has no fiscal impact to the State of Iowa beyond any impact anticipated by the legislation. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 761—Chapter 11. Public Comment Any interested person may submit written comments concerning this proposed rule making or may submit a written request to make an oral presentation at a public hearing. Written comments or requests to present oral comments in response to this rule making must be received by the Department no later than 4:30 p.m. on October 12, 2021. Comments should be directed to: Tracy George Department of Transportation DOT Rules Administrator, Government and Community Relations 800 Lincoln Way Ames, Iowa 50010 Email: tracy.george@iowadot.us Public Hearing If requested, a public hearing to hear oral presentations will be held on October 14, 2021, via conference call at 9 a.m. Persons who wish to participate in the conference call should contact Tracy George before 4:30 p.m. on October 12, 2021, to facilitate an orderly hearing. A conference call number will be provided to participants prior to the hearing. Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rule making. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact Tracy George, the Department’s rules administrator, and advise of specific needs. The public hearing will be canceled without further notice if no oral presentation is requested.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rule-making actions are proposed:

ITEM 1. Amend rule 761—634.1(321) as follows:

761—634.1(321) Information and location. Applications, forms and information regarding this chapter are available by mail from the Driver and Identification Services BureauMotor Vehicle Division, Iowa Department of Transportation, P.O. Box 9204, Des Moines, Iowa 50306-9204; in person at 6310 SE Convenience Blvd., Ankeny, Iowa; by telephone at (515)244-8725; by facsimile at (515)239-1837; or on the department’s website at www.iowadot.gov.

ITEM 2. Amend rule 761—634.11(321) as follows:

761—634.11(321) Driver education—teaching parent. As an alternative to a driver education course offered by a course provider approved under rule 761—634.4(321), a teaching parent may instruct a student in an approved course of driver education. 634.11(1) Definitions. As used in this rule: "Approved course" means a driver education curriculum approved by the department that meets the requirements of Iowa Code section 321.178A and is appropriate for teaching-parent-directed driver education and related behind-the-wheel instruction. "Clear driving record" means the person currently and during the prior two-year period has not been identified as a candidate for suspension or revocation of a driver’s license under the habitual offender or habitual violator provisions of rule 761—615.9(321) or rule 761—615.13(321); is not subject to a driver’s license suspension, revocation, denial, cancellation, disqualification, or bar; and has no record of a conviction for a moving traffic violation determined to be the cause of a motor vehicle accident. "Course vendor" means a third-party vendor that makes available commercially an approved course. "Student" means a person between the ages of 14 and 21 years who is within the custody and control of the teaching parent and who holds a valid Iowa noncommercial instruction permit. "Teaching parent" means the same as defined in Iowa Code section 321.178Aas amended by 2021 Iowa Acts, Senate File 546, section 10. 634.11(2) Application to serve as a teaching parent. a. A person who wishes to provide driver education as a teaching parent to a student shall submit an application on a form provided by the department to the driver and identification services bureau. b. The department shall review the application and shall deny the application for any of the following reasons: (1) The person does not meet the qualifications to serve as a teaching parent set forth in Iowa Code section 321.178A. (2) The person does not have a clear driving record. (3) The application does not properly identify a student eligible to be instructed in driver education by the person. (4) The department has determined the application should be rejected for any reason listed in Iowa Code section 321.13. c. If the application is denied, the department shall issue a letter of denial to the person explaining the reason or reasons for the denial. d. If the application is approved, the department shall issue a letter of approval to the person to serve as a teaching parent for the student identified in the application. 634.11(3) Instruction by a teaching parent. a. A person approved to serve as a teaching parent shall instruct the student using an approved course. b. The teaching parent shall select the course to be used from the list of approved courses posted on the department’s website and shall purchase the course directly from the applicable course vendor. c. No person shall provide driver education as a teaching parent unless approved by the departmentthe person meets the definition of a teaching parent, and the department shall not recognize driver education that was: (1) Provided by a person who is not approved asdoes not meet the definition of a teaching parent. (2) Provided to a person who is not a student as defined in subrule 634.11(1). (3) Offered under a course other than an approved course. 634.11(4) Course completion—certificate of completion. a. Upon the student’s completion of an approved course, the teaching parent shall apply for a certificate of completion on behalf of the student. The teaching parent shall provide evidence showing the student’s completion of an approved course and substantial compliance with the requirements of Iowa Code section 321.178A, by affidavit signed by the teaching parent on a form provided by the department. The teaching parent shall include with the application all documentation, statements, certifications, and logs required by Iowa Code section 321.178A. The application and all required documentation, statements, certifications, and logs shall be submitted to the driver and identification services bureaumotor vehicle division. b. The department shall review the application and evidence submitted and shall deny certification of completion if: (1) The course was not conducted by a person approved by the department to serve asmeeting the definition of a teaching parent for the student for whom certification is sought. (2) The application does not properly identify a student eligible to be instructed in driver education by the teaching parent. (3) The application and evidence do not demonstrate the student’s successful completion of an approved course. (4) The application and evidence do not include all documentation, statements, certifications, and logs required by Iowa Code section 321.178A in adequate and proper form and content. (5) The department has determined that the application should be rejected for any reason listed in Iowa Code section 321.13. c. If the application is denied, the department shall issue a letter of denial to the teaching parent explaining the reason or reasons for the denial. d. If the application is approved, the department shall issue a certificate of completion to the student identified in the application. A certification of completion issued by the department under this subrule shall constitute proof of successful completion of an Iowa-approved course in driver education but shall not be grounds for waiver of a driving test under 761—subrule 604.31(2). 634.11(5) Course approval. a. AFor a course to become an approved course under Iowa Code section 321.178A, a vendor that wishes to offerof a driver education curriculum as an approved course in Iowa shall submit an application on a form provided by the department to the driver and identification services bureaumotor vehicle division, along with a copy of all proposed curriculum materials. A vendor that wishes to offeroffering an electronic curriculum may provide a uniform resource locator (URL) for the proposed electronic materials but must also provide physical copies of the proposed materials. b. To be designated as an approved course, the curriculum submitted must, at a minimum, meet the requirements of Iowa Code section 321.178A, be appropriate for teaching-parent-directed driver education and related street or highway instruction, and meet or exceed the required content set forth in the Appendix to this rule. c. The department shall review the application and proposed curriculum and shall issue a letter of denial to the course vendor explaining the reason or reasons for denial if the proposed curriculum does not meet the requirements for an approved course. d. If the proposed curriculum is approved, the department shall issue a certificate of approval to the vendor designating the curriculum as an approved course and shall list the approved course on the department’s website. Course approval will be issued for one calendar year or for the remainder of a calendar year. The approval expires on December 31 and must be renewed annually by the submission of an application on a form provided by the department and all required materials as set forth in this subrule at least 60 days prior to the expiration date, unless otherwise approved by the department.

ITEM 3. Amend 761—Chapter 634, implementation sentence, as follows: These rules are intended to implement Iowa Code sections 321.178,as amended by 2021 Iowa Acts, House File 380, section 1, and Senate File 546, section 9; 321.178A,as amended by 2021 Iowa Acts, House File 380, section 2, and Senate File 546, sections 10 to 15; 321.180B and 321.194.

ITEM 4. Amend the appendix to rule 761—634.11(321) as follows: Appendix to Rule 761—634.11(321)To be designated as an approved course, a curriculum must, at a minimum, meet the requirements of Iowa Code section 321.178A, be appropriate for teaching-parent-directed driver education and related street or highway instruction, and meet or exceed the required content listed below:1.Duration and required content. The course must provide for both classroom and behind-the-wheel instruction. As used in this rule, “classroom instruction” means instruction provided by a teaching parent in a private setting using printed or electronic course materials, and “behind-the-wheel instruction” means street or highway driving instruction provided by a teaching parentor a person who is qualified to provide street or highway driving instruction pursuant to Iowa Code section 321.178 in a motor vehicle operated by the student.a.Classroom instruction shall consist of at least 30 clock hours of classroom instruction and shall include all of the following:i.Four hours of instructionInstruction concerningdistracted driving and substance abuse.ii.A minimum of 20 minutes of instructionInstruction concerning railroad crossing safety.iii.Instruction relating to becoming an organ donor under the revised uniform anatomical gift Act as provided in Iowa Code chapter 142C.iv.Instruction providing awareness about sharing the road withpedestrians, bicycles and motorcycles.b.Behind-the-wheel instruction shall consist of at least 40 hours of street or highway driving including 4 hours of driving after sunset and before sunrise while accompanied by the teaching parentor a person who is qualified to provide street or highway driving instruction pursuant to Iowa Code section 321.178.2.Required topics. The course may follow any format the vendor determines, provided all of the following topics are properly and adequately covered, as detailed in the course application form provided by the department:a.Traffic law – classroom instructioni.Introduction to driver education and driving laws and privileges.ii.Understanding your license to drive.iii.Right-of-way.iv.Traffic control devices.v.Controlling traffic flow.vi.Alcohol and other drugs.vii.Cooperating with other roadway users.b.Driver preparation – classroom and behind-the-wheel instructioni.Pre-drive tasks.ii.Occupant protection.iii.Symbols and devices.iv.Starting tasks.v.Vehicle operation and control tasks.vi.Post-drive tasks.vii.In-car progress assessment.viii.Driving plan (classroom instruction).c.Vehicle movements – classroom and behind-the-wheel instructioni.Visual attention, mental attention and communication.ii.Reference points.iii.Vehicle balance.iv.Vehicle maneuvers.v.In-car progress assessment (behind-the-wheel instruction).d.Driver readiness – classroom and behind-the-wheel instructioni.Driving practices.ii.Fatigue.iii.Aggressive driving.iv.In-car progress assessment (behind-the-wheel instruction).e.Risk reduction – classroom and behind-the-wheel instructioni.Risk factors.ii.Space management.iii.In-car progress assessment (behind-the-wheel instruction).f.Environmental factors – classroom and behind-the-wheel instructioni.Environmental characteristics.ii.Environmental risk factors.iii.In-car progress assessment (behind-the-wheel instruction).g.Distractions – classroom and behind-the-wheel instructioni.Distractions.ii.Multi-task performances.iii.In-car progress assessment (behind-the-wheel instruction).h.Alcohol and other drugs – classroom instructioni.Introduction of alcohol and other drug problems.ii.Nature of alcohol-related crash problems.iii.Physiological effects of alcohol.iv.Psychological effects of alcohol.v.Other drug effects on the driving task.vi.Zero-tolerance in the driving environment.i.Vehicle movement and reference points – behind-the-wheel instructioni.Vehicle movements and reference points (entering and exiting traffic and parking).ii.In-car progress assessment (behind-the-wheel instruction).j.Adverse conditions – classroom instructioni.Adverse weather and reduced visibility conditions.ii.Traction loss.iii.Emergencies.k.Vehicle requirements – classroom and behind-the-wheel instructioni.Vehicle malfunctions (classroom instruction).ii.Vehicle maintenance (classroom instruction).iii.Trip planning (classroom instruction).iv.Adverse conditions and vehicle requirements – off-street simulated practice (behind-the-wheel instruction).v.In-car progress assessments (behind-the-wheel instruction).l.Consumer responsibility – classroom and behind-the-wheel instructioni.Vehicle use and ownership (classroom instruction).ii.Vehicle insurance (classroom instruction).iii.Environmental protection and litter prevention (classroom instruction).iv.Anatomical gift Act – organ donor (classroom instruction).v.Trip planning (behind-the-wheel instruction).vi.In-car progress assessment (behind-the-wheel instruction).m.Personal responsibility (classroom and behind-the-wheel instruction).i.Comprehensive classroom progress assessment (testing) (classroom instruction).ii.Driver licensing (classroom instruction).iii.In-car progress assessment (behind-the-wheel instruction).ARC 5912CAgriculture and Land Stewardship Department[21]Adopted and Filed

Rule making related to exemption for containment of soil conditioners

The Agriculture and Land Stewardship Department hereby amends Chapter 44, “On-Site Containment of Pesticides, Fertilizers and Soil Conditioners,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 200.14.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 200.14.Purpose and Summary This rule making provides an alternative storage option for soil conditioners consisting of minimally manipulated manures, while continuing to protect the environment and natural resources.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on June 30, 2021, as ARC 5743C. A public hearing was held on July 30, 2021, at 10 a.m. in the Second Floor Conference Room, Wallace State Office Building, Des Moines, Iowa. Commenters who attended the public hearing described the benefits that this rule change would provide to farmers and residents in Iowa. Two written comments were received. Both comments suggested altering the definition of “minimally processed” to provide additional clarity and consistency. Other comments were critical about issues unrelated to or outside the scope of this rule making. This version differs from the Notice by improving the definitions to provide additional clarity.Adoption of Rule Making This rule making was adopted by the Department on August 25, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 21—Chapter 8.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on November 1, 2021. The following rule-making actions are adopted:

ITEM 1. Adopt the following new definitions of “Minimally manipulated manures” and “Minimally processed” in rule 21—44.51(200): "Minimally manipulated manures." Minimally processed, nonliquid substances composed primarily of excreta, plant remains, or mixtures of such substances. "Minimally processed." Processing a nonliquid substance in a manner which does not modify the nutrient value on a dry matter basis.

ITEM 2. Amend rule 21—44.56(200), introductory paragraph, as follows:

21—44.56(200) Secondary containment for nonliquid fertilizers and soil conditioners. Nonliquid fertilizer and soil conditioner stored in a totally enclosed buildingand a soil conditioner meeting the requirements of subrule 44.56(3) are exempt from the requirements of this rule. Unless stored in a totally enclosed building,or soil conditioners meeting the requirements under subrule 44.56(3), all nonliquid fertilizer and soil conditioner materials shall be stored within an area which drains into a secondary containment structure. The secondary containment structure shall have a volume sufficient to retain the equivalent of 12 inches of runoff from the area drained into the containment structure. This minimum storage volume may be provided within the containment structure or in auxiliary storage tanks, and may be constructed of earth, concrete, or a combination of both.

ITEM 3. Adopt the following new subrule 44.56(3): 44.56(3) Soil conditioners consisting entirely of minimally manipulated manures are exempt from the requirements of this rule if all of the following apply to the storage of the soil conditioner: a. The soil conditioner is stored in an impermeable container. b. The soil conditioner is stored in the field of application or adjacent fields of application and the amount stored does not exceed the necessary amount of nitrogen, phosphorus, or potassium to achieve optimal crop yields, as determined by average county or proven yields, on the acres in the fields of application. The total potential acres of application stored in any field shall not exceed an amount necessary for application on 160 acres. c. The soil conditioner is stored in the field for a period not to exceed six months. d. The soil conditioner meets all of the storage requirements for bulk dry animal nutrients under rule 21—49.7(200A). [Filed 8/31/21, effective 11/1/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5910CAlcoholic Beverages Division[185]Adopted and Filed

Rule making related to alcoholic liquor product management

The Alcoholic Beverages Division hereby rescinds Chapter 7, “Representatives of Distillers, Rectifiers, Manufacturers, Brewers and Vintners,” and Chapter 8, “Transportation and Warehouse,” Iowa Administrative Code, and adopts a new Chapter 8 with the same title.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 123.10.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 123.10(2), 123.10(3), 123.10(6) and 123.10(10).Purpose and Summary The adopted amendments update existing rules related to management of alcoholic liquor products available for sale by the Division. The amendments rescind and reserve Chapter 7 and rescind and replace Chapter 8 with new rules. The adopted rules do the following:

Define new terms related to product management;

Describe the various listing classifications under which an alcoholic liquor product may be classified when sold by the Division;

Describe how suppliers of alcoholic liquor products can submit requests for their products to be listed for sale;

Describe how alcoholic liquor products shall be shipped to the Division for sale;

Describe how alcoholic liquor suppliers shall maintain appropriate inventory levels in the Division’s warehouse for alcoholic liquor products available for sale;

Describe how often alcoholic liquor suppliers may make temporary or permanent price changes to alcoholic liquor products listed for sale;

Describe the requirements for how an alcoholic liquor supplier shall remove products from the Division’s warehouse that are no longer listed for sale; and

Describe the requirements for barrel programs offered by alcoholic liquor suppliers.

Overall, the adopted rules reflect the policies and procedures described in the Division’s current Listing Manual. The adopted rules allow for continued responsible and efficient management of the Division’s product portfolio, give the Division the flexibility to respond to marketplace changes, and provide alcoholic liquor suppliers with stability, predictability, and transparency as to how their alcoholic liquor products can be sold in the State of Iowa.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on June 30, 2021, as ARC 5734C. No public comments were received. The Division has made several nonsubstantive changes from the Notice of Intended Action. These changes have been made to more clearly reflect the Division’s original intent for the rules. The first change is to subparagraph 8.3(2)“a”(2), where the word “evenly” has been added to make it clear that the case price of a product shall be evenly divisible by the number of bottles in the case. The second change is to paragraph 8.4(3)“a” to replace the word “shrink-wrapped” with “stretch-wrapped” to more accurately describe the type of material to be used to securely wrap alcoholic liquor products on pallets shipped to the Division by suppliers. Nonsubstantive punctuation and grammar changes have also been made to subrule 8.5(2).Adoption of Rule Making This rule making was adopted by the Administrator, with the approval of the Alcoholic Beverages Commission, on August 26, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Division for a waiver of the discretionary provisions, if any, pursuant to 185—Chapter 19.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on October 27, 2021. The following rule-making actions are adopted:

ITEM 1. Rescind and reserve 185—Chapter 7.

ITEM 2. Rescind 185—Chapter 8 and adopt the following new chapter in lieu thereof: CHAPTER 8TRANSPORTATION AND WAREHOUSE

185—8.1(123) Definitions. "Administrator" means the administrator of the alcoholic beverages division of the department of commerce. "Category" means the classification of an alcoholic liquor product, such as rum, vodka, or whiskey. "Commission" means the alcoholic beverages commission established in Iowa Code chapter 123. "Delist" means the removal of products from the division’s product inventory. "Division" means the alcoholic beverages division of the department of commerce. "Product" means “alcoholic liquor” or “native distilled spirits” as defined in Iowa Code chapter 123. "Supplier" means a manufacturer, distiller, or importer of alcoholic liquors or native distilled spirits shipping, selling, or having such alcoholic beverages brought into this state for resale by the division.

185—8.2(123) Listing classifications. Each product available for sale by the division shall be assigned to one of the following listing classifications. Suppliers may indicate their preferred listing classification; however, final determination shall be made by the administrator or the administrator’s designee. 8.2(1) Permanent. Products with a permanent listing shall be available for sale by the division on an ongoing basis, unless otherwise delisted or temporarily out of stock. 8.2(2) Temporary. Temporary listings shall have a duration determined by the administrator or the administrator’s designee, and the duration may be extended at the discretion of the administrator or the administrator’s designee. 8.2(3) Size extension. A supplier shall submit a listing request for each additional size of a product that is currently listed for sale. All listed sizes of the product should meet sales criteria established by the administrator, or the administrator’s designee, in order for a size extension listing request to be approved as a permanent listing. 8.2(4) Special order. Products that are not currently listed for sale by the division may be purchased through a special order placed with the supplier of the product. a. A request for a special order will be placed with the division by a class “E” liquor control licensee. Special order requests shall be submitted electronically or in a manner prescribed by the administrator or the administrator’s designee. The administrator, or the administrator’s designee, may reject a special order request if it is determined that the requested product is in violation of the requirements set out in subparagraphs 8.3(3)“a”(1) and 8.3(3)“a”(2). b. If the division accepts a special order request, the request shall be forwarded on to the supplier of the product. The supplier may approve or deny the special order request. c. All special order products shall be sold and distributed by the division to class “E” liquor control licensees by the case only. d. Special order products are not eligible for return to the division by a class “E” liquor control licensee without approval from the administrator or the administrator’s designee. 8.2(5) Special order on hand. Products that are frequently sold as special orders but do not qualify for permanent listing may be listed as special order on hand. a. To be eligible for classification as a special order on-hand listing, a product must have been previously sold as a special order and meet sales criteria established by the administrator or the administrator’s designee. b. Products that have been delisted shall not be eligible to be moved from permanent listing to special order on-hand listing. 8.2(6) Highly allocated. Highly allocated products are products of a limited supply as determined by the supplier. a. Highly allocated products may be sold via a lottery system as deemed necessary by the administrator or the administrator’s designee. b. Highly allocated products shall not be available for sale as special orders. 8.2(7) Quantity limitations. Quantities of listed products available for purchase by class “E” liquor control licensees may be limited at the administrator’s, or the administrator’s designee’s, discretion.

185—8.3(123) Listing requests. The supplier of a product to be sold by the division shall submit a listing request for consideration by the administrator or the administrator’s designee. 8.3(1) Submitting a listing request. Listing requests shall be submitted electronically or in a manner prescribed by the administrator or the administrator’s designee. 8.3(2) Listing request requirements. a. A listing request shall contain the following information: (1) A control state code number for the product issued by the National Alcohol Beverage Control Association. (2) The supplier’s f.o.b. cost per case. The case price shall be evenly divisible by the number of bottles in the case. The supplier shall determine the number of bottles that constitute a case for the product. (3) The product’s case quantity size and standard of fill. (4) An image of the product. (5) A brief description of the product. (6) The weights and dimensions of the product container, case, and pallet. (7) The product’s 14-digit shipping container code. (8) The product’s universal product code. (9) Any other information required by the administrator or the administrator’s designee. b. The administrator, or the administrator’s designee, may require a supplier to conduct a listing presentation for new products that have not been previously listed. 8.3(3) Decisions. a. The criteria used to determine whether a listing request shall be approved or denied shall include, but not be limited to, the following: (1) Whether the product violates the code of responsible practices established by the Distilled Spirits Council of the United States. (2) The reasonable potential of the product to unduly jeopardize the welfare, health, peace, morals, or safety of the people of the state. b. The administrator, or the administrator’s designee, shall approve or deny a listing request not more than 20 business days from the date the listing request was submitted. Suppliers shall be notified of the decision in writing delivered electronically or in a manner prescribed by the administrator or the administrator’s designee. 8.3(4) Appeals. a. Appeal to administrator. (1) A supplier may appeal the denial of a listing request by the administrator’s designee to the administrator by filing a notice of appeal within 30 days of the date of denial. (2) A notice of appeal shall be in writing and shall specify the specific findings or conclusions to which exception is taken, the relief sought, and the grounds for relief. (3) A notice of appeal shall be considered filed at the time it is received by the administrator. (4) The administrator shall affirm, reverse, or modify the denial of the listing request and shall notify the supplier of the decision in writing. b. Appeal to commission. (1) If the administrator denies a listing request or affirms the denial of a listing request by the administrator’s designee, the supplier may appeal the administrator’s decision by filing a notice of appeal with the commission within 30 days of the date of the administrator’s decision. (2) A notice of appeal shall be in writing and shall specify the specific findings or conclusions to which exception is taken, the relief sought, and the grounds for relief. (3) A notice of appeal shall be considered filed at the time it is received by the commission. (4) The commission shall have discretion as to whether to hear the appeal. If the commission chooses to hear the appeal, it shall be heard at the next scheduled commission meeting or a special meeting called for by the commission chairperson, the administrator, or at least three members of the commission. (5) If the commission reverses the decision of the administrator, the listing request shall be approved. (6) If the commission affirms the administrator’s decision or chooses not to hear the appeal, the listing request shall be denied. (7) The commission’s decision shall constitute final agency action for the purposes of Iowa Code chapter 17A. 8.3(5) Resubmission of a listing request. If a listing request for a product is denied, a new listing request for the product may be submitted by the supplier not less than three months after the denial date of the original listing request. 8.3(6) Moratorium. The administrator, or the administrator’s designee, may implement a moratorium on new permanent listing requests. The duration of the moratorium period shall be determined by the administrator or the administrator’s designee. The administrator, or the administrator’s designee, may allow a supplier to trade out a permanently listed product for a new product during a moratorium period.

185—8.4(123) Shipment of product to the division. Shipments of product intended for sale by the division shall be made in accordance with this rule. 8.4(1) Product shipments into the state. Product shipments shall only be made into the state of Iowa by suppliers. 8.4(2) Product shipment locations. Product shipments shall only be made to a state warehouse or to receiving points designated by the administrator. 8.4(3) Pallet requirements. a. Products shipped to the division shall be on securely stretch-wrapped pallets that are in good repair. The administrator, or the administrator’s designee, may establish additional requirements as deemed necessary. b. Products shipped to the division on slip sheets shall not be accepted by the division and shall be returned to the supplier. 8.4(4) Case labeling requirements. a. Each case of product shipped to the division shall include a case code label placed on an end panel of the case. b. The case code label shall contain the following information: (1) The control state code number issued by the National Alcohol Beverage Control Association for the product. (2) The product’s universal product code and corresponding barcode. (3) The 14-digit shipping container code and corresponding barcode. The shipping container code and barcode shall meet the minimum requirements established by the American National Standards Institute and the International Organization for Standardization. (4) Any other information required by the administrator or the administrator’s designee. 8.4(5) Bottle deposit requirements. a. All products intended for resale by the division shall meet the requirements of Iowa Code section 455C.5 and rule 567—107.3(455C). Products that do not meet the requirements shall not be made available for sale until the requirements are met. b. Suppliers may purchase bottle deposit refund stickers from the division. The cost of the stickers to suppliers shall not exceed the division’s cost of producing and distributing the stickers. 8.4(6) Special handling charges. Product shipments that do not meet the requirements of subrule 8.4(3), 8.4(4), or 8.4(5) shall result in the assessment of special handling charges against the supplier in an amount not to exceed the division’s actual cost to bring the shipments into compliance. The division’s actual cost shall be determined using the negotiated hourly rate of the third party the division has contracted with for warehousing services.

185—8.5(123) Inventory levels. The administrator, or the administrator’s designee, shall establish maximum and minimum inventory levels for each listed product. Maximum and minimum inventory levels may be adjusted at the discretion of the administrator or the administrator’s designee. 8.5(1) Purchase orders. Suppliers shall submit purchase orders to the division electronically, or in a manner prescribed by the administrator or the administrator’s designee, as needed to maintain appropriate inventory levels. 8.5(2) Maximum inventory level exception. A supplier may request from the division an exception to the established maximum inventory level for a product. Requests for a maximum inventory level exception shall be submitted to the division electronically or in a manner prescribed by the administrator or the administrator’s designee. The administrator, or the administrator’s designee, shall approve or deny the request, and the supplier shall be notified of the decision in writing delivered either electronically or in a manner prescribed by the administrator or the administrator’s designee.

185—8.6(123) Pricing. 8.6(1) Permanent price changes. Suppliers may make permanent price changes to the case cost of products in any listing classification. a. The frequency at which permanent price changes may be made shall be determined by the administrator or the administrator’s designee. b. Permanent price changes shall be submitted electronically, or in a manner prescribed by the administrator or the administrator’s designee, at least 20 business days prior to the effective date. 8.6(2) Temporary price reductions. Suppliers may make temporary price reductions to the case cost of products with a permanent or temporary listing classification. a. Products with a listing classification of special order, special order on hand, or highly allocated shall not be eligible for temporary price reductions. b. Temporary price reductions shall become effective as determined by the administrator or the administrator’s designee. c. Temporary price reductions shall be submitted electronically, or in a manner prescribed by the administrator or the administrator’s designee, at least 20 business days prior to the effective date. 8.6(3) Price lists. The division shall publish a price list electronically on a monthly basis showing the price to be paid by class “E” liquor control licensees for each brand, variety, and category of product available for sale by the division. The price list shall be published on the division’s website at shop.iowaabd.com and may be distributed to class “E” liquor control licensees as deemed necessary by the administrator or the administrator’s designee.

185—8.7(123) Delisting. Listed products that do not meet sales guidelines established by the administrator, or the administrator’s designee, may be delisted. The frequency of delisting shall be determined by the administrator or the administrator’s designee. 8.7(1) Notification. Suppliers of delisted products shall be notified of the decision in writing delivered electronically or in a manner prescribed by the administrator or the administrator’s designee. 8.7(2) Appeals. a. Appeal to administrator. (1) A supplier may appeal the delisting of a product by the administrator’s designee to the administrator by filing a notice of appeal within 30 days of the date of delisting notification. (2) A notice of appeal shall specify the specific findings or conclusions to which exception is taken, the relief sought, and the grounds for relief. (3) A notice of appeal shall be considered filed at the time it is received by the administrator. (4) The administrator shall affirm, reverse, or modify the delisting and shall notify the supplier of the decision in writing. b. Appeal to commission. (1) If the administrator delists a product, or if the administrator affirms a delisting by the administrator’s designee, the supplier may appeal the administrator’s decision by filing a notice of appeal with the commission within 30 days of the date of the administrator’s decision. (2) A notice of appeal shall specify the specific findings or conclusions to which exception is taken, the relief sought, and the grounds for relief. (3) A notice of appeal shall be considered filed at the time it is received by the commission. (4) The commission shall have discretion as to whether to hear the appeal. If the commission chooses to hear the appeal, it shall be heard at the next scheduled commission meeting or a special meeting called for by the commission chairperson, the administrator, or at least three members of the commission. (5) If the commission reverses the decision of the administrator, the product shall remain listed under terms established by the commission. (6) If the commission affirms the administrator’s decision, or chooses not to hear the appeal, the product shall be delisted. (7) The commission’s decision shall constitute final agency action for the purposes of Iowa Code chapter 17A. 8.7(3) Removal of delisted products. Delisted products shall be removed from the division’s warehouse by the supplier or by the supplier’s agent or employee within a time frame established by the administrator or the administrator’s designee. A supplier may authorize the division to destroy a delisted product in lieu of removal of the product by the supplier from the division’s warehouse. New listing requests submitted by a supplier shall not be considered by the division until all of the supplier’s delisted product has been removed from the division’s warehouse. 8.7(4) Resubmission of a delisted product for listing. If a product in a permanent listing classification is delisted, a new listing request for the product may be submitted not less than six months after the date the product was removed from the warehouse.

185—8.8(123) Barrel programs. A supplier may offer a barrel program, allowing a class “E” liquor control licensee to purchase the bottled contents of a barrel-aged product along with the aging barrel. 8.8(1) Barrel programs shall be uniformly offered to all class “E” liquor control licensees. 8.8(2) Suppliers may sample barrel-aged products pursuant to rule 185—16.8(123). 8.8(3) Barrel program products shall be classified as special orders. 8.8(4) Products purchased as part of a barrel program shall be sold and delivered to the individual class “E” liquor control licensee that placed the special order. Barrel program special orders and products shall not be split between two or more class “E” liquor control licensees. 8.8(5) Aging barrels sold in conjunction with a barrel program shall bear conspicuous and substantial advertising matter. 8.8(6) Bottles from a barrel program may bear customized labels. These rules are intended to implement Iowa Code sections 123.10(2), 123.10(3), 123.10(6), and 123.10(10). [Filed 8/30/21, effective 10/27/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5907CEconomic Development Authority[261]Adopted and Filed

Rule making related to targeted small businesses

The Economic Development Authority (IEDA) hereby amends Chapter 52, “Iowa Targeted Small Business Certification Program,” and Chapter 55, “Targeted Small Business Financial Assistance Program,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 15.106A.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 15.108 and 2013 Iowa Acts, House File 324.Purpose and Summary Pursuant to Iowa Code section 15.108, the IEDA certifies targeted small businesses (TSBs) and provides technical and financial assistance to TSBs. TSBs are certified pursuant to Chapter 52 if they are 51 percent or more owned by a minority, woman, person with a disability, or service-disabled veteran and meet other criteria for certification. The Targeted Small Business Financial Assistance Program provides loans to TSBs pursuant to Chapter 55. The amendments to Chapter 52 make it clear that a business owner with targeted status must be an Iowa resident and that eligibility for certification or recertification of TSBs will be determined pursuant to the rules in effect on the date of application. The amendments to Chapter 55 update the chapter to reflect current administration of the loan program, including removal of references to grants and loan guarantees. Additionally, these amendments describe the role of the microloan service provider with which the IEDA was directed to contract to administer the program by 2013 Iowa Acts, House File 324.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on May 19, 2021, as ARC 5622C. No public comments were received. No changes from the Notice have been made.Adoption of Rule Making This rule making was adopted by the IEDA on August 20, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the IEDA for a waiver of the discretionary provisions, if any, pursuant to 261—Chapter 199.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on October 27, 2021. The following rule-making actions are adopted:

ITEM 1. Amend rule 261—52.1(15), definition of “Targeted group person (TGP),” as follows: "Targeted group person" "TGP" means a person who is a minority, woman, person with a disability, or service-disabled veteranand is either an Iowa resident or a resident of a contiguous state who lives within 50 miles of the targeted small business the person owns, operates, and actively manages.

ITEM 2. Amend rule 261—52.2(15) as follows:

261—52.2(15) Certification. The authority is responsible for ascertaining that a small business is owned, operated, and actively managed by a targeted group person. 52.2(1) Regular certification. Before a small business can participate in the Iowa targeted small business program, it must be certified by the authority. a. The authority shall review applications from small businesses to determine whether they are eligible to participate in the programpursuant to this chapter as in effect as of the date of application for certification. b. Certification means the authority has determined that the business meets eligibility standards. c. Applications for the targeted small business certification are available by contacting the authority or by visiting the authority’s website: Iowa Economic Development Authority200 East Grand AvenueDes Moines, Iowa 50309(515)725-3000www.iowaeconomicdevelopment.com1963 Bell Avenue, Suite 200Des Moines, Iowa 50315515.348.6200www.iowaeda.com d. Applicants shall receive written notification of the authority’s decision. 52.2(2) Recertification. Certified businesses shall submit verification of continued eligibility to the authority at least every two years. a. The application for recertification will be provided by the authority. b. Other documents will be requested to verify the continuing eligibility of the business. c. The authority shall determine whether a certified business is eligible for recertification pursuant to this chapter as in effect as of the date of application for recertification. 52.2(3) Information required in application. Various and specific documentation may be required by the authority during the certification or recertification process. Each business shall provide relevant information upon the authority’s request in order to be considered for certification or recertification. Applications shall be signed by an authorized representative of the business. An authorization to release information is part of each application and shall be signed by the applicant. This signature shall be notarized. 52.2(4) A business may reapply upon proof of compliance with TSB certification standards. Any company that is denied certification or decertified for any reason bears the burden of proving that all deficiencies previously cited have been corrected. Corrections shall be in accordance with requirements governing the targeted small business program. The burden of proof to recertify a business is the responsibility of the owner of that business. 52.2(5) The business shall notify the authority within 30 days following a change in ownership or control of a certified business. A new application shall be filed showing the change and must be accompanied by sufficient documentation to determine whether the business continues to be eligible to participate in the TSB program. 52.2(6) An applicant for certification as an Iowa targeted small business may indicate in writing that a similar application is pending with an agency other than the authority. When the authority considers another certification process equal to or more stringent than the process described in these rules, an applicant may submit the information required for the other process. The authority may certify a business as a TSB based on copies of the information provided to another agency. The Iowa application for certification as a TSB may still be required. Certification as a targeted small business in Iowa is granted only by the authority. Certification by any other entity does not ensure certification as a targeted small business in Iowa. 52.2(7) Disability determinations. a. Person with a disability.In order to be considered a person with a disability for the purpose of the TSB program, the person must qualify and receive certification as having a disability from a licensed medical physician or must have been found eligible for vocational rehabilitation services by the department of education, division of vocational rehabilitation services, or by the department for the blind. b. Service-disabled veteran.In order to be considered a service-disabled veteran for the purpose of the TSB program, the person must provide written verification from the Veterans Administration or the U.S. Department of Defense of a service-connected disability, as defined in 38 U.S.C. Section 101(16).

ITEM 3. Amend subrule 52.3(3) as follows: 52.3(3) The information contained in the application may be reviewed by the applicant upon request to the Iowa Economic Development Authority, 200 East Grand Avenue, Des Moines, Iowa 50309; (515)725-3000authority. Material to be added to a file may be sent to the authority.

ITEM 4. Rescind rule 261—55.2(15) and adopt the following new rule in lieu thereof:

261—55.2(15) Definitions. As used in this chapter, the following definitions shall apply: "Authority" means the economic development authority created in Iowa Code section 15.105. "Disability" means the same as defined in Iowa Code section 15.102(10)“b.” "Microloan service provider" means a service provider that has contracted with the authority to provide financial and technical assistance to targeted small businesses. "Program" means the targeted small business financial assistance program established pursuant to this chapter. "Review committee" means a committee established by the authority or microloan service provider to review program applications pursuant to subrule 55.3(8). "Targeted small business" "TSB" means a small business which is 51 percent or more owned, operated, and actively managed by one or more women, minority persons, service-disabled veterans, or persons with a disability provided the business meets all of the following requirements:

Is located in this state;
Is operated for profit;
Has an annual gross income of less than $4 million computed as an average of the three preceding fiscal years.

ITEM 5. Rescind rule 261—55.3(15).

ITEM 6. Renumber rule 261—55.4(15) as 261—55.3(15).

ITEM 7. Amend renumbered rule 261—55.3(15) as follows:

261—55.3(15) Loan and grant programApplication and approval. 55.3(1) Application procedures. Application materials may be obtained from the IDED business finance team, any small business development center (SBDC), or any of the business advocate service providersauthority or microloan service provider. 55.3(2) Maximum funding levels. In no case shall an award exceed $50,000, nor in the case of a loan shall the. The interest rate chargedshall not exceed 5 percent per annum or be less than 0 percent per annum. Under no circumstances shall the targeted small business financial assistance program fund 100 percent of a project. A targeted small business shall not receive a loan, grant, or loan guarantee or a combination of loans, grants, or loan guarantees under the program that provideprovides more than 90 percent of the funding for a project. All applicants must invest at least 10 percent of the total project budget in cash. 55.3(3) Forms of financial assistance availableTerm. The following types of financial assistance may be awarded under this program: loans, grants, loan guarantees or a combination of loans, grants and loan guarantees.a. Direct loan. The term of a loan shall not exceed five years; the interest rate shall not exceed 5 percent per annum. b. Grant.Grant funds shall only be awarded in instances where the grant will leverage a significant amount of other financing, such as conventional or SBA financing packages. In order to receive a grant, the applicant must demonstrate a minimum of 10 percent cash investment in the project. c. Loan guarantee.The program shall provide guarantees not to exceed 80 percent for loans of up to seven years made by qualified lenders. 55.3(4) Eligible uses of funds. Awards of funds under this programProgram funds shall be used for legitimate business expenses, including, but not limited to, the following purposes: purchase of equipment and furnishings, inventory, purchase of and improvements to land and buildings and specific operating expenses. 55.3(5) Ineligible uses of funds. Targeted small business financial assistanceProgram funds shall not be used to refinance existing debt. ExistingFor the purposes of this subrule, existing debt in the context of this rule does not include interim financing for allowable program purposes intended as a bridge loan obtained after the date of the targeted small business awarda program loan is approved. Neither shall the department awardProgram fundsshall not be used to facilitate financing of a project which would consist solely of relocation of an existing business within Iowa. IDED may waive this limitation if the business demonstrates to IDED that it faces unusual circumstances which make the relocation necessary for the business’s continued viability. 55.3(6) Threshold criteria. Applicants for funds under the targeted small business financial assistance program must meet the following minimum criteria before their applications will be considered complete and eligible for rankingevaluation: a. If applying as a TSB, the business must be certified as a “targeted small business” by the department of inspections and appeals before applying for funding. In order to be certified as a targeted small business, a business owner must be a woman, a targeted minority, or a person with a disability and have established at least 51 percent ownership of the business, and be actively involved in the day-to-day management of the business. (The targeted small business owner must have the expertise or related experience in order to be considered actively involved in the day-to-day management of the business.)The business must be eligible for certification as a targeted small business pursuant to 261—Chapter 52 at the time of application. The authority or microloan service provider will educate applicants about the benefits of such certification and encourage applicants to seek certification. b. After the TSB has been awarded a loan or grant or a loan guarantee, the TSB must continue to be a certified TSB for the life of the loan or grant. Failure to meet this requirement may result in the loan or grant being called and due within 30 days. This will include all principal, interest and any penalties that have been assessed. If recertification occurs within 30 days of the date of the notice, the original terms will be reinstated.An applicant must be a resident of Iowa for at least six months to be eligible to apply for assistance. Applicants may be asked to provide necessary documentation to prove legal residency. c. All applicants shall comply with the requirements of 261—Chapter 172. 55.3(7) Submittal process. All applications and related informational materials shall be submitted on forms prescribed by IDEDand in the manner prescribed by the authority or microloan service provider. Completed applications shall be submitted to: Targeted Small Business Financial Assistance Program, Bureau of Business Finance, Iowa Department of Economic Development, 200 East Grand Avenue, Des Moines, Iowa 50309. 55.3(8) Review process. All completed TSB applications are reviewed by the program manager on an ongoing basis. a. Applications are reviewed for completeness. If additional information is required, the program managerauthority or microloan service provider shall send the applicant notice to submit additional information. The applicant shall then have three weeks from the date of the IDED letter to submit the requested information.If the requested information is not provided by the deadline indicated in the notice, the application may be considered incomplete or ineligible. b. The authority or microloan service provider will establish a committee of at least three individuals to review all applications.Application requests are initially rated for funding by IDED staff. They are then reviewed on a monthly basis by the board. The board is an advisory committee established by 2007 Iowa Acts, House File 890, to assist the department in the evaluation of applications. The board is comprised of private sector representatives experienced in small business management and operation. The board membership shall consist of seven members, including one each from the following populations: Latino, Black, Asian or Pacific Islander, Caucasian women, Native American, and a person with a disability as defined in Iowa Code section 15.102 as amended by 2007 Iowa Acts, House File 890. One of the members shall be a member of the economic development board appointed by the economic development board. A quorum is four members. It requires the vote of at least four board members to recommend action on an application to the director. The board may recommend to the director the approval, denial, or deferral of an application. If less than a quorum of the board is present at a meeting, an application will be forwarded to the director without a recommendation from the board. 55.3(9) Rating factorsEvaluation. Applicants must score a minimum of 60 out of a possible 100 points in order to be recommended for funding. Points are awarded based on the information contained in the applicationApplications are evaluated according to the following criteria: a. Business plan (20 points possible).Factors considered include: Does the application contain significant information regarding the product or service to be offered? Has the applicant provided sufficient documentation to support/justify the cash flow assumptions, e.g., third-party documentation regarding market size, annual sales and competition? b. Financial plan (20 points possible).Factors considered include: Does the application contain comprehensive two-year cash flow projections which show the viability of the business? Does the application provide completed personal financial information and information on other funding sources? c. Financial need (20 points possible).Factors considered include: the applicant’s personal liquid assets and the applicant’s ability or inability to secure a loan from conventional sources (i.e., bank, savings and loan, credit union, SBA). d. Marketing plan (5 points possible).Factors considered include: Does the application contain sufficient information to ascertain that the applicant fully understands who the customers are and how to effectively reach them? e. Management expertise and related experience (20 points possible).Factors considered include: Does the applicant have education or work experience that is relevant to the proposed business? Does the application document previous business training or management experience? f. Loan repayment (10 points possible).Factors considered include: Does the application document the business’s ability to service its debt? g. Nontraditional (5 points possible).Factors considered include: Is the proposed business category one in which TSBs have traditionally been underrepresented as owners? h. Extra points (up to 5 points).Extra credit points may be awarded to applicants meeting the requirements described in 261—Chapter 171 for the award of extra points (e.g., project is in a blighted, brownfield or distressed area). a. Applicant credit score and outstanding liabilities. b. Source(s) of the applicant’s income. c. Debt service coverage ratio. 55.3(10) Negotiations of funds awarded. a. The departmentauthority reserves the right to negotiate the amount, term, interest rate, and other conditions of the loan or grant prior to award.The amount, term, interest rate, and other conditions may be negotiated by a microloan service provider on behalf of the authority. b. The departmentauthority or microloan service provider may decline to award funds to a business if there is a negative credit report (e.g., bankruptcy, foreclosure, tax liens,or unpaid or past due child support). 55.3(11) Award processdecision. Upon approval by the directorIf an application is approved by the review committee, the applicant business will receive an award letter which shall state the amount of award, conditions of the award, any security agreements, and the amount of monthly loan repayments.If an application is denied by the review committee, the applicant will receive a denial letter stating the reason for denial. 55.3(12) Contract. Following notification of award, contracts are prepared for execution between the business owner and IDED. After execution of the contract, the business owner may request disbursement of funds, on the form prescribed by IDED. The time frame between final award date and disbursement of funds will generally be one to two months. 55.3(13) Deferral process. Applications may be deferred only one time by the loan review committee. If all additional information requested is received within the three-week time frame, the application will be considered on the following month’s agenda. If information is not received in a timely manner, second consideration will be delayed by 30 days. No application will be held for over 60 days. If the request for additional information is not answered, the application will be denied. 55.(14) 55.3(12) Reapplication. Upon denial by the director, anAn applicantwhose application is denied by the review committee cannot resubmit an application for funding under the targeted small business financial assistancethe program for 90 days (3 months) from the date of IDED’sthe denial letter. 55.3(15) Default. When a loan is in default for a period of 60 days, the IDED shall notify the office of the attorney general and request appropriate action. 55.3(16) Misuse of funds. A person receiving funds under the TSB financial assistance loan program may be subject to criminal penalties under Iowa Code section 15A.3 if it is determined that the person knowingly made a false statement in writing to procure economic development assistance from the state. 55.3(17) Comprehensive management assistance and entrepreneurial development. a. Limitation.Comprehensive management assistance and entrepreneurial development is limited to businesses or individuals that have been awarded TSB funding. b. Use of funds.Assistance is available only in the form of technical or professional assistance. This may be accomplished by use of department staff or department-contracted professional services in assisting the business to develop:

Management skills;
Inventory controls;
Financial controls;
Marketing plans;
Personnel assistance; or
Other related business assistance.

c. Determination of assistance.The administrator for the division of business development shall have the authority to approve contracts for management assistance. The maximum of case management assistance shall not exceed $2,500 per business or individual.

ITEM 8. Renumber rule 261—55.7(15) as 261—55.4(15).

ITEM 9. Amend renumbered rule 261—55.4(15) as follows:

261—55.4(15) Monitoring and reporting for loan, grant, and loan guarantee programs. 55.4(1) Monitoring. IDEDThe authority or microloan service provider reserves the right to monitor the recipient’s records to ensure compliance with the terms of the award. The department retains the authority toauthority or microloan service provider may request information on the condition of the business at any time during the life of the loan to determine the status of the project. IDEDAuthority or microloan service provider staff will contact the loan or grant recipient within 90 days of the award and as frequently as conditions may warrant during the life of the loan or grant. 55.4(2) Management assistance. The departmentauthority or microloan service provider may require a program recipient to consult with designated small business service providers for assistance with various aspects of the management and operation of the business. 55.4(3) If the authority or microloan service provider determines that a borrower is in default, the authority may seek recovery of the loan plus interest or other penalties, negotiate alternative payment schedules, suspend or discontinue collection efforts and take other action as the authority deems necessary. 55.4(4) A person receiving funds under the program may be subject to criminal penalties under Iowa Code section 15A.3 if it is determined that the person knowingly made a false statement in writing to procure economic development assistance from the state.

ITEM 10. Rescind rule 261—55.5(15) and adopt the following new rule in lieu thereof:

261—55.5(15) Disbursement of funds. An approved applicant shall acknowledge and agree to the terms proposed by the authority or microloan service provider prior to disbursement of funds. Requests for disbursement and loan documents shall be in the form and content specified by the authority.

ITEM 11. Rescind and reserve rule 261—55.6(15).

ITEM 12. Amend 261—Chapter 55, implementation sentence, as follows: These rules are intended to implement Iowa Code sections 15.102 and 15.24715.108 and 2013 Iowa Acts, House File 324. [Filed 8/23/21, effective 10/27/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5913CPharmacy Board[657]Adopted and Filed

Rule making related to terminology used in relation to deaf or hard-of-hearing persons

The Board of Pharmacy hereby amends Chapter 6, “General Pharmacy Practice,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 147.76.State or Federal Law Implemented This rule making implements, in whole or in part, 2020 Iowa Acts, House File 2585.Purpose and Summary This amendment provides conforming language relating to the terminology used in relation to deaf and hard-of-hearing persons.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on June 16, 2021, as ARC 5704C. No public comments were received. No changes from the Notice have been made.Adoption of Rule Making This rule making was adopted by the Board on August 31, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 657—Chapter 34.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on October 27, 2021. The following rule-making action is adopted:

ITEM 1. Amend subrule 6.14(4) as follows: 6.14(4) Oral counseling not practicable. If in the pharmacist’s professional judgment oral counseling is not practicable, the pharmacist may select and use alternative forms of patient information which shall include information for the patient or patient’s caregiver to contact the pharmacist for further consultation. The manner in which the patient or caregiver contacts the pharmacist shall not cause the patient to incur any expense. “Not practicable” refers to patient variables including, but not limited to, the absence of the patient or patient’s caregiver, the patient’s or caregiver’s hearing impairmentdisorder, or a language barrier. “Not practicable” does not include pharmacy variables such as inadequate staffing, technology failure, or high prescription volume. A combination of oral counseling and alternative forms of counseling is encouraged. [Filed 9/1/21, effective 10/27/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5914CPharmacy Board[657]Adopted and Filed

Rule making related to temporary designation of controlled substances

The Board of Pharmacy hereby amends Chapter 10, “Controlled Substances,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 124.201.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 124.201.Purpose and Summary These amendments temporarily amend the Iowa Code to add 15 substances to Schedule I (brorphine, a synthetic opioid, and 14 fentanyl-related substances) and specifically exclude one substance from Schedule II (samidorphan, an opioid receptor antagonist) of the Iowa Controlled Substances Act, conforming with scheduling action taken by the federal Drug Enforcement Administration.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on June 16, 2021, as ARC 5705C. The Iowa Pharmacy Association submitted a comment in support of the rule making. No changes from the Notice have been made.Adoption of Rule Making This rule making was adopted by the Board on August 31, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 657—Chapter 34.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on October 27, 2021. The following rule-making action is adopted:

ITEM 1. Rescind rule 657—10.39(124) and adopt the following new rule in lieu thereof:

657—10.39(124) Temporary designation of controlled substances. 10.39(1) Amend Iowa Code section 124.204(2) by adding the following new paragraphs: bt. N-phenyl-N-(1-(2-phenylpropyl)piperidin-4-yl)propionamide. Other name: beta-methyl fentanyl. bu. N-(1-phenethylpiperidin-4-yl)-N,3-diphenylpropanamide. Other names: beta-phenyl fentanyl, 3-phenylpropanoyl fentanyl. bv. N-(1-(2-flourophenethyl)piperidin-4-yl)-N-(2-fluorophenyl)propionamide. Other name: 2’-Fluoro ortho-fluorofentanyl, 2’-fluoro 2-fluorofentanyl. bw. N-(1-(4-methylphenethyl)piperidin-4-yl)-N-phenylacetamide. Other name: 4’-Methyl acetyl fentanyl. bx. N-(2-fluorophenyl)-N-(1-phenethylpiperidin-4-yl)butyramide. Other names: ortho- Fluorbutyryl fentanyl, 2-fluorobutyryl fentanyl. by. N-(2-methylphenyl)-N-(1-phenethylpiperidin-4-yl)acetamide. Other names: ortho-Methyl acetylfentanyl, 2-methyl acetylfentanyl. bz. 2-methoxy-N-(2-methylphenyl)-N-(1-phenethylpiperidin-4-yl)acetamide. Other names: ortho-Methyl methoxyacetyl fentanyl, 2-methyl methoxyacetyl fentanyl. ca. N-(4-methylphenyl)-N-(1-phenethylpiperidin-4-yl)propionamide. Other names: para-Methylfentanyl, 4-methylfentanyl. cb. N-(1-phenethylpiperidin-4-yl)-N-phenylbenzamide. Other names: Phenyl fentanyl, benzoyl fentanyl. cc. N-(1-phenethylpiperidin-4-yl)-N-phenylthiophene-2-carboxamide. Other names: Thiofuranyl fentanyl, 2-thiofuranyl fentanyl, thiophene fentanyl. cd. Ethyl (1-phenethylpiperidin-4-yl)(phenyl)carbamate. Other name: fentanyl carbamate. ce. N-(2-fluorophenyl)-N-(1-phenethylpiperidin-4-yl)acrylamide. Other name: ortho-Fluoroacryl fentanyl. cf. N-(2-fluorophenyl)-N-(1-phenethylpiperidin-4-yl)isobutyramide. Other name: ortho-Fluoroisobutyryl fentanyl. cg. N-(4-fluorophenyl)-N-(1-phenethylpiperidin-4-yl)furan-2-carboxamide. Other name: para-Fluoro furanyl fentanyl. 10.39(2) Amend Iowa Code section 124.204(9) by adding the following new paragraph: y. 1-(1-(1-(4-bromophenyl)ethyl)piperidin-4-yl)-1,3-dihydro-2H-benzo[d]imidazole-2-one. Other names: brorphine, 1-[1-[1-(4-bromophenyl)ethyl]-4-piperidinyl]-1,3-dihydro-2H-benzimidaol- 2-one. 10.39(3) Amend Iowa Code section 124.206(2)“a” by rescinding and replacing the introductory text as follows: a. Opium and opiate, and any salt, compound, derivative, or preparation of opium or opiate excluding apomorphine, thebaine-derived butorphanol, dextrorphan, nalbuphine, naldemedine, nalmefene, naloxegol, naloxone, 6beta-naltrexol, naltrexone, and samidorphan, and their respective salts, but including the following: [Filed 9/1/21, effective 10/27/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5930CRevenue Department[701]Adopted and Filed

Rule making related to board of review removal hearing procedures

The Revenue Department hereby amends Chapter 7, “Practice and Procedure Before the Department of Revenue,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 421.14 and section 441.32(2)“e” as enacted by 2021 Iowa Acts, House File 871, section 29.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 17A and section 441.32(2) as amended by 2021 Iowa Acts, House File 871, section 29.Purpose and Summary This rule making implements a hearing procedure when the Director of Revenue intends to remove a member of the local board of review under Iowa Code section 441.32(2) as amended by 2021 Iowa Acts, House File 871, section 29, and the board member requests a hearing. The rule making describes the process for requesting a hearing, the governing procedures of the hearing, the contents of the request for hearing, and the burden of proof at such a hearing.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on July 28, 2021, as ARC 5797C. No public comments were received. No changes from the Notice have been made.Adoption of Rule Making This rule making was adopted by the Department on September 1, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A).Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on October 27, 2021. The following rule-making action is adopted:

ITEM 1. Adopt the following new rule 701—7.38(441):

701—7.38(441) Appeals and hearings regarding the director’s intent to remove a member of the board of review. 7.38(1) Written request for hearing. A member of the board of review who has received a notice of intent to remove from the director and who wishes to contest the removal shall file a written request for a hearing within 30 days after the receipt of the notice of the director’s intent to remove the member. Any person who does not seek a hearing within 30 days of receipt of the notice of the director’s intent to remove shall be precluded from challenging the removal. 7.38(2) Procedures. Hearings will be governed by the procedures set forth in this rule together with the procedures set forth in the following rules: a. The introductory paragraph of rule 701—7.8(17A), excluding the first sentence of the introductory paragraph of 701—7.8(17A); and subrules 7.8(8) and 7.8(9); b. Subrules 7.9(1) and 7.9(2); c. Rule 701—7.10(17A); d. Paragraphs 7.11(2)“d” and “e”; e. Subrules 7.12(2) to 7.12(4); f. Rule 701—7.13(17A); g. Rule 701—7.14(17A); h. Rule 701—7.15(17A); i. Rule 701—7.16(17A); j. Subrule 7.17(1); subrules 7.17(3) through 7.17(7); subrule 7.17(8), except paragraph 7.17(8)“b” related to costs shall not apply; additionally, Iowa Code section 421.60 shall not apply; subrules 7.17(9), 7.17(10), and 7.17(14); k. Rule 701—7.18(17A); l. Rule 701—7.19(17A); m. Rule 701—7.20(17A); n. Rule 701—7.21(17A); and o. Rule 701—7.22(17A). 7.38(3) Presiding officer. The director shall be the presiding officer in a contested case under this rule. The director may request that an administrative law judge assist and advise the director with any matters related to the contested case proceedings, including but not limited to ruling on any prehearing matters, presiding at the contested case hearing, and issuing orders and rulings. 7.38(4) Contents of the appeal. The appeal shall contain the following in separate numbered paragraphs: a. A statement of the department action giving rise to the appeal. b. The date of the department action giving rise to the appeal. c. Each error alleged to have been committed, listed as a separate paragraph. For each error listed, an explanation of the error and all relevant facts related to the error shall be provided. d. Reference to the particular statutes, rules, or agreement terms, if known. e. References to and copies of any documents or other evidence relevant to the appeal. f. Any other matters deemed relevant to the appeal. g. A statement setting forth the relief sought. h. The signature, mailing address, and telephone number of the person or that person’s representative. 7.38(5) Burden of proof. The burden of proof is on the party challenging the director’s intent to remove a board member. This rule is intended to implement Iowa Code section 441.32(2)“e” as enacted by 2021 Iowa Acts, House File 871, section 29, and Iowa Code chapter 17A. [Filed 9/3/21, effective 10/27/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5916CRevenue Department[701]Adopted and Filed

Rule making related to penalties and waivers

The Revenue Department hereby amends Chapter 10, “Interest, Penalty, Exceptions to Penalty, and Jeopardy Assessments,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 421.14.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 421.27; 2020 Iowa Acts, House File 2641; 2021 Iowa Acts, Senate File 608; and 2021 Iowa Acts, Senate File 366.Purpose and Summary During the 2021 Legislative Session, the Department requested that the Legislature modify Iowa Code section 421.27, which sets forth penalties and penalty waivers related to the filing of tax returns and payment of tax. The changes were enacted and signed into law as 2021 Iowa Acts, Senate File 608, and became effective July 1, 2021. Through the process of designing the Department’s new tax administration system, the Department reviewed how and when certain penalties are imposed or waivers apply to those penalties in both the current system and what the Department desires in the new system. During this review, the Department identified legal requirements that, due to system constraints, legacy systems could not support without substantial manual intervention. The goal of the changes made by Senate File 608 is to make penalties and waivers easier to understand and implement. The changes are either taxpayer-neutral or taxpayer-friendly. These penalties and waivers generally apply to all taxpayers for all tax types. The Department has adopted these amendments to its rules implementing Iowa Code section 421.27 to reflect the changes made by Senate File 608. The Department has also revised and published its Penalty Waiver Request Form to reflect the changes to the law. This rule making also implements the penalty for failure to timely file an income return by a specified business (C corporations, S corporations, partnerships, and financial institutions) with no tax due that was enacted in 2020 Iowa Acts, House File 2641, division I, and amended by 2021 Iowa Acts, Senate File 366, division V. Under Iowa law, this new penalty will apply to tax years beginning on or after January 1, 2022.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on July 28, 2021, as ARC 5796C. No public comments were received. No changes from the Notice have been made.Adoption of Rule Making This rule making was adopted by the Department on September 1, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. The fiscal estimate for 2021 Iowa Acts, Senate File 608, did not indicate any impact.Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A).Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on October 27, 2021. The following rule-making actions are adopted:

ITEM 1. Amend rule 701—10.5(421) as follows:

701—10.5(421) Improper receipt of credit,or refund, exemption, reimbursement, rebate, or other payment or benefit. 10.5(1) Erroneous application. A person who makes an erroneous application for refund,or credit, exemption, reimbursement, rebate, or other payment or benefit shall be liable for any overpayment received plus interest at the rate in effect under Iowa Code section 421.7, subsection 2421.7(2). In addition, a 10.5(2) Willfully false or frivolous application. Aperson who willfully makes a false or frivolous applicationor willfully submits any false information, document, or document containing false information in support of an application for refund,or credit, exemption, reimbursement, rebate, or other payment or benefit with the intent to evade tax or with the intent to receive a refund,or credit, exemption, reimbursement, rebate, or other payment or benefit to which the person is not entitled is guilty of a fraudulent practice and is liable for a penalty equal to 75 percent of the refund,or credit, exemption, reimbursement, rebate, or other payment or benefit claimed.This penalty is not subject to waiver. This rule is intended to implement Iowa Code section 421.27 as amended by 2010 Iowa Acts, House File 2531, section 1242021 Iowa Acts, Senate File 608.

ITEM 2. Rescind the division heading before rule 701—10.6(421).

ITEM 3. Amend rule 701—10.6(421) as follows:

701—10.6(421) Penalties. 10.6(1) Penalties applicable to all taxpayers. A penalty shall be assessed upon all tax and deposits due under the following circumstances:described in this subrule. The rates for penalties described in this rule are uniform for all tax types. Unless otherwise specified in this subrule, see rule 701—10.7(421) for waivers that may apply to these penalties. 1a. For failure to timely file a return,or deposit form there is a 105 percent penaltyon the unpaid tax. This penalty, once imposed, will be assessed on all subsequent amountsfound by the taxpayer or the department to be due or required to be shown due on the return or deposit formfor the tax period. This penalty is in addition to any other penalty provided by law. 2b. For failure to timely pay the tax due on a return or deposit form, there is a 5 percent penaltyon the unpaid tax. This penalty is in addition to any other penalty provided by law. 3c. For a deficiency of tax due on a return or deposit form found during an auditor examination, there is a 5 percent penaltyon the unpaid tax. For purposes of this penalty, the audit deficiency shall be assessed only when there is a timely filed return or deposit form.This penalty is in lieu of the penalty for failure to timely pay but is in addition to any other penalty provided by law.Audit deficiency occurs when the department determines additional tax is due. 4d. For willful failure to file a return or deposit form with the intent to evade taxor a filing requirement, or in the case of willfully filing a false return or deposit form with the intent to evade tax, there is a 75 percent penalty.This penalty is in lieu of other penalties applicable under this rule. This penalty is not subject to waiver.The penalty rates are uniform for all taxes and deposits due under this chapter.The penalty for failure to timely file will take precedence over the penalty for failure to timely pay or an audit deficiency when more than one penalty is applicable.

Examples to illustrate the computation of penalty for tax periods beginning on or after January 1, 1991.

e. For failure to remit at least 90 percent of the tax due by the time an extension for further time to file a return is made, there is a 10 percent penalty on the unpaid tax. f. For failure to remit payment of taxes in the form or manner required by the rules of the director, there is a 5 percent penalty on the amount of the payment remitted in the incorrect form or manner, not to exceed $500 per instance. This penalty shall be waived if the taxpayer was not notified of the requirement to remit tax payments electronically or if the incorrect electronic transmission of the payment was made before the taxpayer was notified of the requirement to remit tax payments electronically. 10.6(2) Penalties applicable to specified businesses for tax years beginning on or after January 1, 2022, in which no tax is due. a. Definitions. For purposes of this subrule, the following definitions apply: "Imputed Iowa liability" means the specified business’s Iowa net income after the application of the Iowa business activity ratio, if applicable, multiplied by the applicable tax rate for the tax year, less any Iowa tax credits available to be claimed by the specified business in the current year. The applicable tax rate is:

In the case of an entity taxed as a C corporation, the top corporation income tax rate under Iowa Code section 422.33,
In the case of a financial institution as defined in Iowa Code section 422.61, the franchise tax rate under Iowa Code section 422.63, or
In the case of an entity taxed as an S corporation or partnership, the top individual income tax rate under Iowa Code section 422.5A.

"Income return" includes an Iowa corporation income tax return (IA 1120), an Iowa franchise tax return (IA 1120F), an Iowa S corporation income tax return (IA 1120S), and an Iowa partnership income tax return (IA 1065). "Specified business" means any of the following:

An entity taxed as a C corporation that is required to file an Iowa corporation income tax return (IA 1120). This includes a consolidated group of corporations electing or required to file an Iowa consolidated return under Iowa Code section 422.37.
An entity taxed as an S corporation that is required to file an Iowa S corporation income tax return (IA 1120S).
A financial institution that is required to file an Iowa franchise tax return (IA 1120F).
An entity taxed as a partnership that is required to file an Iowa partnership income tax return (IA 1065).

b. For a failure by a specified business to timely file an income return when no tax is due, a penalty shall be assessed equal to the greater of $200 or 5 percent of the imputed Iowa liability of the specified business, not to exceed $25,000. A specified business that has Iowa tax due for a tax year (such as an S corporation subject to Iowa income tax on built-in gains or passive investment income) is not subject to this penalty for that tax year but may be subject to other penalties provided in this rule. c. For willful failure by a specified business to file an income return with no tax shown due with the intent to evade a filing requirement, or in the case of willfully filing a false income return with no tax shown due with the intent to evade reporting of Iowa-source income, a penalty shall be assessed equal to the greater of $1,500 or 75 percent of the imputed Iowa liability of the specified business. This penalty is not subject to waiver. A specified business that has Iowa tax due for a tax year (such as an S corporation subject to Iowa income tax on built-in gains or passive investment income) is not subject to this penalty for that tax year but may be subject to other penalties provided in this rule. 10.6(3) Examples. The following are examples to illustrate the computation of penalties imposed underthis rule 701—10.7(421). For purposes of these examples, interest has been computed at the rate of 12 percent per year or 1 percent per month. The tax due amounts are assumed to be the total amounts required to be shown due when considering whether the failure to pay penalty should be assessed on the basis that less than 90 percent of the taxdue was paid.Example (a) — Failure toTimely Fileand Failure to Timely Paya. Tax due is $100.b. Return filed 32 months and 10 days after the due date.c. $100$0 paid with the returnprior to filing.The calculation for additional taxthe total amount due3 months after the due date is shown below:Tax$100Penalty10 (10%5% for failure to timely file, 5% for failure to timely pay)Interest43(43 months interest)Totalamount due$114$113Less payment100Additional tax due$ 14Example (b) — Failure toTimely Paya. Tax due is $100.b. Return is timely filed.c. $0 paidwith the return.The calculation for the total amount due 5 months after the due date is shown below:Tax$100Penalty5 (5% for failure to timely pay)Interest5(5 months interest)Totalamount due$110Example (c) — Failure to File and Failure to Paya. Tax due is $100.b. Return is filed 2 months and 10 days after the due date.c. $0 paid.The calculation for the total amount due 3 months after the due date is shown below:Tax$100Penalty10 (10% for failure to file)Interest3(3 months interest)Total due in 3rd month$113Example (d)(c) — AuditDeficiency on Timely Filed Returna. $100 in additional tax found due.Timely filed return reported $100 tax due.b. Timely filed return.$100 paid with return.c. Audit completed 8 months after the due date of the return.d. Return showed $100 as the computed tax, which was paid with the return.$100 in additional tax found due during audit.The calculation for the total amount due is shown below:Computed tax after audit$200Less tax paid with return100 Additional tax due$100Penalty5(5% for audit deficiency)Interest8(8 months interest)Totalamount due$113Example (e)(d) — AuditDeficiency on Late Return Granted an Exception From Failure to Filea. Tax duereported on return is $100.b. Return filed 3 months and 10 days after the due date.c. $100 paid with the return.d. Taxpayer is granted an exception from penalty for failure totimely fileand failure to timely pay. (Return is then considered timely filed.)e. Audit completed 8 months after the due date of the return. $100 additional tax found due.f. Return showed $100 as the computed tax which was paid with the return.$100 additional tax found due during audit.The computation for the total amount due is shown below:Computed taxTax due after audit$200Less tax paid with return100 Additional tax due$100Penalty5(5% for audit deficiency. No penalty for failure to file.)Interest8(8 months interest)Totalamount due$113Example (f)(e) — AuditDeficiency on Late Filed Return No Pay Returna. $100 claimed as taxTax due reported on the returnis $100.b. $100 in additional tax found due.Return filed 3 months and 10 days after the due date.c. Return filed 3 months and 10 days after the due date.$114 in tax, penalty, and interest paid with the return.d. Audit completed 8 months after the due date.e. $100 additional tax found due during audit.The computation for the total amount due is shown below:Tax due reported on original return$100Penalty10(5% for failure to timely file, 5% for failure to timely pay)Interest4(4 months interest)Total amount due on original return$114ComputedAdditional taxdue after audit$200$100Penalty2010(10%5% for failure to file, 5% for audit deficiency)Interest168(8 months interest)Amount due after audit$118Totalamount duefor tax period$236$232Example (f) — Failure to Timely File by a Specified Businessa. Tax due for tax year 2023 is $0 because the entity is a partnership (IA 1065).b. Return is filed 7 months and 10 days after the due date.c. Partnership net income after calculation of the Iowa business activity ratio is $30,000.d. Net income multiplied by the top individual tax rate in 2023 of 6.5 percent is $1,950.e. Iowa tax credits available are $1,000.f. Imputed Iowa liability is $950.g. The penalty is the greater of 5 percent of the imputed Iowa liability ($48) or $200.The calculation for the total amount due is shown below:Tax$0Penalty200Interest0Total amount due$200

ITEM 4. Amend rule 701—10.7(421) as follows:

701—10.7(421) Waiver of penalty—definitions. A penalty, if assessed, shall be waived by the department upon a showing of the circumstances stated below.Under certain circumstances, the penalty for failure to timely file a return, failure to timely pay the tax due with the filing of a return, or failure to pay following an audit by the department is waived. The taxpayer has the burden to prove the necessary conditions to waive a penalty. 10.7(1) Definitions.For purposes of these rulesthis rule, the following definitions apply: "Act of God" means an unusual and extraordinary manifestation of nature which could not reasonably be anticipated or foreseen and cannot be prevented by human care, skill, or foresight. There is a rebuttable presumption that an “act of God” that precedes the due date of the return or form by 30 days is not an act of God for purposes of an exception to penalty. "Immediate family" includes the spouse, children, or parents of the taxpayer. There is a rebuttable presumption that relatives of the taxpayer beyond the relation of spouse, children, or parents of the taxpayer are not within the taxpayer’s immediate family for purposes of the waiver exceptions. "Sanctioned self-audit program" means an audit performed by the taxpayer with forms provided by the department as a result of contact by the department to the taxpayer prior to voluntary filing or payment of the tax. Filing voluntarily without contact by the department does not constitute a sanctioned self-audit. "Serious, long-term illness or hospitalization" means an illness or hospitalization, documented by written evidence, which precedes the due date of the return or form by no later than 30 days and continues through the due date of the return or form and interferes with the timely filing of the return or form. There is a rebuttable presumption that an illness or hospitalization that precedes the due date of the return or form by more than 30 days is not an illness or hospitalization for purposes of an exception to penalty. The taxpayer will be provided an automatic extension of 30 days from the date the return or form is originally due or the termination of the serious, long-term illness or hospitalization whichever is later without incurring penalty. The taxpayer has the burden of proof on whether or not a serious, long-term illness or hospitalization has occurred. "Substantial authority" means the weight of authorities for the tax treatment of an item is substantial in relation to the weight of authorities supporting contrary positions.In determining whether there is substantial authority, only the following will be considered authority: applicable provisions of Iowa statutes; the Internal Revenue Code; Iowa administrative rules construing those statutes; court cases; administrative rulings; legal periodicals; department newsletters and tax return and deposit form instruction booklets; tax treaties and regulations; and legislative intent as reflected in committee reports.Conclusions reached in treaties, legal opinions rendered by other tax professionals, descriptions of statutes prepared by legislative staff, legal counsel memoranda, and proposed rules and regulations are not authority.There is substantial authority for the tax treatment of an item if there is substantial authority at the time the return containing the item is due to be filed or there was substantial authority on the last day of the taxable year to which the return relates.The taxpayer must notify the department at the time the return, deposit form, or payment is originally due of the substantial authority the taxpayer is relying upon for not filing the return or deposit form or paying the tax due. 10.7(2) Reserved.Documentation. Unless otherwise indicated, written documentation is required to support the waiver of a penalty. 10.7(3) For failure to timely file a return or failure to timely pay tax due, the 5 percent penalties shall be waived upon a showing of the following exceptions. a. An amount of tax greater than $0 is due and at least 90 percent of the tax required to be shown due has been paid by the due date of the tax return. This exception does not apply to the penalty for failure to timely file by a specified business under subrule 10.6(2). b. A taxpayer required to file a monthly or quarterly return is allowed one late return or one late payment within a three-year period. (1) The use by the taxpayer of any other penalty exception under this subrule will not count as a late return or payment for purposes of this subrule. (2) If the taxpayer receives this waiver, the taxpayer must make timely filings and payments for three years prior to being eligible for another waiver under this paragraph. (3) This exception does not apply to an income return, a franchise return, or a moneys and credits return. (4) This exception will automatically be applied to a return or payment by the department if the taxpayer is eligible for the exception. (5) This exception is determined on the basis of the tax period for which the return or payment is due and not the date on which the return is filed or payment is made. c. Death of a taxpayer, a member of the immediate family of the taxpayer, or the person directly responsible for filing the return and paying the tax, when the death interferes with timely filing of a return or timely payment of tax. The taxpayer will be provided an extension of 30 days from the date the return or payment is originally due without incurring penalty. There is a rebuttable presumption that a death that occurs more than 30 days before the original date the return or payment is due does not interfere with timely filing or payment. The taxpayer, or taxpayer’s legal representative, has the burden of supplying proof of when the death occurred. d. The onset of serious, long-term illness or hospitalization of the taxpayer, a member of the taxpayer’s immediate family, or the person directly responsible for filing the return and paying the tax when such illness or hospitalization interferes with the timely filing of a return or timely payment of tax. (1) There is a rebuttable presumption that the onset of an illness or hospitalization that precedes the due date of the return or payment form by more than 30 days does not interfere with the timely filing or timely payment of tax. (2) The taxpayer will be provided an extension of at least 30 days from the date the return or payment form is originally due or until the illness or hospitalization no longer reasonably interferes with the taxpayer’s ability to file the return without incurring penalty. (3) The taxpayer has the burden of proof on whether or not a serious, long-term illness or hospitalization has occurred, when it occurred, and how the illness or hospitalization interfered with the taxpayer’s ability to timely file a return or timely pay. e. Destruction of records by fire, flood, or act of God when the destruction interferes with the timely filing of a return or timely payment of tax. There is a rebuttable presumption that an “act of God” that precedes the due date of the return or payment by 30 days or more did not interfere with the timely filing or payment. f. The taxpayer presents proof that the taxpayer at the due date of the return or payment relied upon applicable, documented, written advice made specifically to the taxpayer, to the taxpayer’s preparer, or to an association representative of the taxpayer from the department, state department of transportation, county treasurer, or Internal Revenue Service. The advice should be relevant to the agency offering the advice and not beyond the scope of the agency’s area of expertise and knowledge. The reliance must be the direct cause of the failure to file or failure to pay, and the advice must be current and not superseded by a court decision, ruling of a quasi-judicial body such as an administrative law judge or the director, or by the adoption, amendment, or repeal of a rule or law. g. Reliance upon the results of a previous audit was a direct cause for failure to file or pay where the previous audit expressly and clearly addressed the issue and the previous audit results have not been superseded by a court decision or by adoption, amendment, or repeal of a rule or law. h. The taxpayer presents documented proof of substantial authority to rely upon a particular position or upon proof that all facts and circumstances are disclosed on a return. Mathematical, computation, or transposition errors are not considered as facts and circumstances disclosed on a return. These types of errors will not be considered as penalty exceptions. i. The return or payment is timely, but erroneously, mailed with adequate postage to the Internal Revenue Service, another state agency, or a local government agency and the taxpayer provides proof of timely mailing with adequate postage. The taxpayer must provide competent evidence of the mailing as stated in Iowa Code section 622.105. j. The tax has been paid by the wrong licensee and the payments were timely remitted to the department for one or more tax periods prior to notification by the department. k. The failure to file was discovered through a sanctioned self-audit program conducted by the department. l. The availability of funds in payment of tax required to be made through electronic funds transfer is delayed and the delay of availability is due to reasons beyond the control of the taxpayer. m. For estates with disclaimers, a penalty will not be imposed for failure to pay or a late-filed Iowa inheritance tax return if the sole reason for the failure to pay or late-filed inheritance tax return is due to a beneficiary’s decision to disclaim property or disclaim an interest in property from the estate. However, for the penalty to be waived, the Iowa inheritance tax return must be filed and all tax must be paid to the department within the later of nine months from the date of death or 60 days from the delivery or filing date of the disclaimer pursuant to Iowa Code section 633E.12. 10.7(4) In addition to any applicable waivers for failure to timely pay the tax due on a return in subrule 10.7(3), the 5 percent penalty for failure to timely pay the tax due shall be waived upon a showing of any of the following exceptions: a. The taxpayer voluntarily files an amended return and pays all tax shown to be due on the return prior to any contact by the department, except under a sanctioned self-audit program conducted by the department. b. The taxpayer provides written notification to the department of a federal audit while it is in progress and voluntarily files an amended return which includes a copy of the federal document showing the final disposition or final federal adjustments within 60 days of the final disposition of the federal government’s audit. 10.7(5) For a deficiency of tax due on a return found during an audit or examination, the 5 percent penalty is waived under the following exceptions: a. At least 90 percent of the tax due has been paid by the due date. b. The taxpayer presents proof that the taxpayer relied upon applicable, documented, written advice specifically made to the taxpayer, to the taxpayer’s preparer, or to an association representative of the taxpayer from the department, state department of transportation, county treasurer, or federal Internal Revenue Service, whichever is appropriate, that the reliance was the direct cause for the failure to pay and the advice has not been superseded by a court decision, ruling by a quasi-judicial body, or the adoption, amendment, or repeal of a rule or law. c. Reliance upon results in a previous audit was a direct cause for the failure to pay the tax due where the previous audit expressly and clearly addressed the issue and the previous audit results have not been superseded by a court decision or the adoption, amendment, or repeal of a rule or law. d. The taxpayer presents documented proof of substantial authority to rely upon a particular position or upon proof that all facts and circumstances are disclosed on a return. Mathematical, computation, or transposition errors are not considered as facts and circumstances disclosed on a return. These types of errors will not be considered as penalty exceptions.

ITEM 5. Rescind and reserve rules 701—10.8(421) and 701—10.9(421).

ITEM 6. Amend rule 701—10.76(453A) as follows:

701—10.76(453A) Penalties. 10.76(1) Cigarettes. The following is a list of offenses which subject the violator to a penalty:

The failure of a permit holder to maintain proper records;
The sale of taxable cigarettes without a permit;
The filing of a late, false or incomplete report with the intent to evade tax by a cigarette distributor, distributing agent or wholesaler;
Acting as a distributing agent without a valid permit; and
A violation of any provision of Iowa Code chapter 453A or these rules.

Penalties for these offenses are as follows:

A $200 penalty for the first violation.

A $500 penalty for a second violation within three years of the first violation.

A $1,000 penalty for a third or subsequent violation within three years of the first violation.

Penalties for possession of unstamped cigarettes are as follows:

A $200 penalty for the first violation if a person is in possession of more than 40 but not more than 400 unstamped cigarettes.

A $500 penalty for the first violation if a person is in possession of more than 400 but not more than 2,000 unstamped cigarettes.

A $1,000 penalty for the first violation if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring prior to July 1, 2004. A $25 per pack penalty for the first violation if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring on or after July 1, 2004.

For a second violation within three years of the first violation, the penalty is $400 if a person is in possession of more than 40 but not more than 400 unstamped cigarettes; $1,000 if a person is in possession of more than 400 but not more than 2,000 unstamped cigarettes; and $2,000 if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring prior to July 1, 2004. A $35 per pack penalty applies if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring on or after July 1, 2004.

For a third or subsequent violation within three years of the first violation, the penalty is $600 if a person is in possession of more than 40 but not more than 400 unstamped cigarettes; $1,500 if a person is in possession of more than 400 but not more than 2,000 unstamped cigarettes; and $3,000 if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring prior to July 1, 2004. A $45 per pack penalty applies if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring on or after July 1, 2004.

See rule 701—10.6(421) for penalties related to failure to timely file a return, failure to timely pay the tax due, audit deficiency, and willful failure to file a return with the intent to evade the tax. If, upon audit, it is determined that any person has failed to pay at least 90 percent of the tax imposed by Iowa Code chapter 453A, division I, which failure was not the result of a violation enumerated above, a penalty of 5 percent of the tax deficiency shall be imposed. This penalty is not subject to waiver for reasonable cause.See rule 701—10.8(421)701—10.7(421) for statutory exceptions to penalty. 10.76(2) Tobacco. See rule 701—10.6(421) for penalties related to failure to timely file a return, failure to timely pay the tax due, audit deficiency, and willful failure to file a return with the intent to evade the tax.See rule 701—10.8(421)701—10.7(421) for statutory exceptions to penalty. This rule is intended to implement Iowa Code sections 453A.28, 453A.31 and 453A.46 as amended by 2004 Iowa Acts, Senate File 2296.

ITEM 7. Amend rule 701—10.79(453A) as follows:

701—10.79(453A) Request for statutory exception to penalty. Any taxpayer who believes there is a good reason to object to any penalty imposed by the department for failure to timely file returns or pay the tax may submit a request for exception seeking that the penalty be waived. The request must be in the form of a letter or affidavit and must contain all facts alleged by the taxpayer and a reason for why the taxpayer qualifies for the exceptions. See rule 701—10.8(421)701—10.7(421). This rule is intended to implement Iowa Code sections 453A.31 and 453A.46. [Filed 9/1/21, effective 10/27/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5915CRevenue Department[701]Adopted and Filed

Rule making related to sales tax administrative procedures

The Revenue Department hereby amends Chapter 12, “Filing Returns, Payment of Tax, Penalty and Interest,” Chapter 13, “Permits,” Chapter 14, “Computation of Tax,” Chapter 15, “Determination of a Sale and Sale Price,” Chapter 17, “Exempt Sales,” Chapter 30, “Filing Returns, Payment of Tax, Penalty and Interest,” Chapter 40, “Determination of Net Income,” Chapter 53, “Determination of Net Income,” Chapter 108, “Local Option School Infrastructure Sales and Service Tax,” Chapter 213, “Miscellaneous Taxable Services,” and Chapter 231, “Exemptions Primarily of Benefit to Consumers,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 421.14.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 423.Purpose and Summary The Department has several chapters of rules that implement a variety of sales tax administrative procedures set forth in Iowa Code chapter 423. This rule making updates those chapters to make a variety of nonsubstantive changes. Implementation sentences and other Iowa Code references are updated from Iowa Code sections no longer in effect or related to sales tax. Headings and subheadings have been added to long rules that currently do not have them to provide additional clarity for readers. Rules describing the law for specifically identified time periods in the past have been stricken, since they are no longer needed. Tax rates have been updated to reflect the current law. Some rules are rescinded because they are entirely out of date or have been replaced by newer, more recently adopted rules in other chapters. The term “specified digital products” has been added to references of taxable sales because those products became taxable several years ago. This rule making also amends rules in other chapters to update affected cross-references.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on July 28, 2021, as ARC 5790C. No public comments were received. No substantive changes from the Notice have been made.Adoption of Rule Making This rule making was adopted by the Department on September 1, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A).Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on October 27, 2021. The following rule-making actions are adopted:

ITEM 1. Amend rule 701—12.1(422), parenthetical implementation statute, as follows:

701—12.1(422423) Returns and payment of tax.

ITEM 2. Amend rule 701—12.1(422), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 421.14, 422.43, 422.47, 422.51, 422.52, and 423.2423.31 and 423.32.

ITEM 3. Amend rule 701—12.2(422,423) as follows:

701—12.2(422,423) Remittances. 12.2(1) Submission of remittances. The correct amount of tax collected and due shall accompany the forms prescribed by the department unless requirements for electronic transmission of remittances or deposits and related information specify otherwise. The name, address, and permit number of the sender and amount of tax for the quarterly remittance or a semimonthly or monthly deposit shall be stated unless requirements for electronic transmission of remittances or deposits and related information specify otherwise. Every return shall be signed and dated. Reporting forms and a self-addressed return envelope shall be furnished by the department to the taxpayer unless electronic transmission requirements apply; and, when. When feasible, the taxpayer shall use themthe items provided by the department when completing and mailing a return and remittance. All remittances shall be made payable to the Iowa Department of Revenue. 12.2(2) Electronic payments required for semimonthly remitters. Semimonthly deposits and quarterly remittances of taxpayers required to make semimonthly deposits shall be made electronically in a format and by means specified by the department. Deposit forms are not required to be filed when electronic transmission of deposits is done in the prescribed format by specified means. Quarterly returns shall be filed separately from the electronic transfer of remittances for taxpayers required to make semimonthly deposits. Deposits and remittances transmitted electronically are considered to have been made on the date that the deposit or remittance is added to the bank account designated by the treasurer of the state of Iowasubmitted in the electronic submission system. The filing of a return within the period prescribed by law and payment of the tax required to be shown thereon are simultaneous acts and if either condition is not met, a penalty shall be assessed. This rule is intended to implement Iowa Code sections 422.16, 422.51, 422.52, 423.6, 423.13 and 423.14423.31 and 423.32.

ITEM 4. Amend rule 701—12.3(422), parenthetical implementation statute, as follows:

701—12.3(422423) Permits and negotiated rate agreements.

ITEM 5. Amend subrule 12.3(2) as follows: 12.3(2) Direct pay permits. Effective January 1, 1998, qualified purchasers, users, and consumers of tangible personal property, specified digital products, or enumeratedtaxable services pursuant to Iowa Code chapters 422, 422B, andchapter 423 may remit tax owed directly to the department of revenue instead of the tax being collected and remitted by the seller. A qualified purchaser, user, or consumer may not be granted or exercise this direct pay option except upon proper application to the department and only after issuance of the direct pay permit by the director of the department of revenue. a. Qualifications for a direct pay permit.To qualify for a direct pay permit, all of the following criteria must be met: (1) The applicant must be a purchaser, user, or consumer of tangible personal property, specified digital products, or enumeratedtaxable services. (2) The applicant must have an accrual of sales and use tax liability on consumed goods of more than $4,000 in a semimonthly period. A purchaser, user, or consumer may have more than one business location and can combine the sales and use tax liabilities on consumed goods of all locations to meet the requirement of $4,000 in sales and use tax liability in a semimonthly period to qualify, if the records are located in a centralized location. If a purchaser, user, or consumer is combining more than one location, only one direct pay tax return for all of the combined locations needs to be filed with the department. However, local option sales and service tax should not be included in the tax base for determining qualification for a direct pay permit. If a purchaser, user, or consumer has more than one location, but not all locations wish to remit under a direct pay permit, the purchaser, user, or consumer must indicate which locations will be utilizing the direct pay permit at the time of application. (3) The applicant must make deposits and file returns pursuant to Iowa Code section 422.52. See subrule 12.3(2), paragraph “d,” for further details. b. Nonqualifying purchases or uses.The granting of a direct pay permit is not allowed for any of the following: (1) Taxes imposed on the sale, furnishing, or service of gas, electricity, water, heat, pay television service, or communication service. (2) Taxes imposed under Iowa Code section 422C.3 (sales tax on the rental receipts of qualifying rental motor vehicles), Iowa Code section 423.7 (use tax on the sale or use of motor vehicles), or Iowa Code section 423.7A (use tax on the lease price of qualifying leased motor vehicles). c. Application and permit information.To obtain a direct pay permit, a purchaser, user, or consumer must properly complete an application form prescribed by the director of revenue and provide certification that the purchaser, user, or consumer has paid sales and use tax to the department of revenue or vendors over the last two years prior to application, an average of $4,000 in a semimonthly period.Upon approval, the director will issue a direct pay permit to qualifying applicants. The permit will contain direct pay permit identifying information including a direct pay permit identification number. The direct pay permit should be retained by the permit holder. When purchasing from a vendor, a permit holder should give the vendor a certificate of exemption containing the information as set forth in rule 701—15.3(422,423). d. Remittance and reporting.Sales, use, and local option tax that is to be reported and remitted to the department will be on a semimonthly basis. Remittance of tax due under a direct pay permit will begin with the first quarter after the direct pay permit is issued to the holder. The tax to be paid under a direct pay permit must be remitted directly to the department by electronic funds transfer (EFT) only. A permit holder need not have remitted by EFT prior to obtaining a direct pay permit to qualify for such a permit. However, a permit holder must remit taxes due by EFT for transactions entered into on or after the date the permit is issued. All local option sales and service tax due must be reported and remitted at the same time as the sales and use taxes due under the direct pay permit for the corresponding tax period. However, local option sales and service tax should not be included in the tax base for determining qualification for a direct pay permit or frequency of remittance. Reports should be filed with the department on a quarterly basis. The director may, when necessary and advisable in order to secure the collection of tax due, require an applicant for a direct pay permit or a permit holder to file with the director a qualified surety bond as set forth in Iowa Code section 422.52. A permit holder who fails to report or remit any tax when due is subject to the penalty and interest provisions set forth in Iowa Code section 422.52. e. Permit revocation and nontransferability.A direct pay permit may be used indefinitely unless it is revoked by the director. A direct pay permit is not transferable and it may not be assigned to a third party. The director may revoke a direct pay permit at any time the permit holder fails to meet the requirements for a direct pay permit, misuses the direct pay permit, or fails to comply with the provisions in Iowa Code section 422.53. If a direct pay permit is revoked, it is the responsibility of the prior holder of the permit to inform all vendors of the revocation so the vendors may begin to collect tax at the time of purchase. A prior permit holder is responsible for any tax, penalty, and interest due for failure to notify a vendor of revocation of a direct pay permit. f. Record-keeping requirements.The parties involved in transactions involving a direct pay permit shall have the following record-keeping duties: (1) Permit holder. The holder of a direct pay permit must retain possession of the direct pay permit. The permit holder must keep a record of all transactions made pursuant to the direct pay permit in compliance with rule 701—11.4(422,423). (2) Vendor. A vendor must retain a valid exemption certificate under rule 701—15.3(422,423) which is received from the direct pay permit holder and retain records of all transactions engaged in with the permit holder in which tax was not collected, in compliance with rule 701—11.4(422,423). A vendor’s liability for uncollected tax is governed by the liability provisions of a seller under an exemption certificate set forth in rule 701—15.3(422,423).

ITEM 6. Amend rule 701—12.3(422), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 422.45(20) and 422.53 as amended by 1997 Iowa Acts, House File 266section 423.36.

ITEM 7. Amend rule 701—12.4(422) as follows:

701—12.4(422423) Nonpermit holders. Persons not regularly engaged in selling at retail and who do not have a permanent place of business but are temporarily engaged in selling from trucks, portable roadside stands, concessionaires at state, county, district, or local fairs, carnivals and the like shall collect and remit tax on a nonpermit basis. In such cases, a nonpermit identification certificate will be issued by the department for record-keeping purposes and may be displayed in the same manner as a sales tax permit. If the department deems it necessary and advisable in order to secure the collection of tax, transient or itinerant sellers shall be required to post a bond or certificate of deposit. A cash bond or a surety bond issued by a solvent surety company authorized to do business in Iowa shall be acceptable, provided the bonding company is approved by the insurance commissioner as to solvency and responsibility. The amount and type of bond shall be determined according to the rules promulgated by the director.The department shall determine the due date of returns and payment of tax for temporary permit holders, giving due consideration to the type of business and frequency of sales. Persons holding nonpermit identification certificates may be required to remit tax upon demand or at the end of the event.Persons regularly engaged in selling tangible personal propertyor a specified digital product which is exempt from tax, making nontaxable transactions, or engaged in performing a service which is not enumerated in Iowa Code section 422.43423.2 shall not be required to obtain a sales tax permit. However, if the retailer makes taxable sales or provides taxable services, the retailer will be required to hold a permit under the provisions of this rule. This rule is intended to implement Iowa Code section 422.53423.36.

ITEM 8. Amend rule 701—12.5(422,423) as follows:

701—12.5(422,423) Regular permit holders responsible for collection of tax. A regular permit holder may operate by selling merchandise by trucks, canvassers, or itinerant salespeople over fixed routes within the county in which the permanent place of business is located or other counties in this state. When this occurs, the regular permit holder is liable for reporting and paying tax on these sales. The person doing the selling for the regular permit holder shall be required to have a form, either in possession or in the vehicle, which authorizes that person to collect tax. This form is obtained from the department and shall contain the name, address, and permit number of the retailer according to the records of the department. This rule is intended to implement Iowa Code sections 422.53 and 423.9423.14 and 423.36.

ITEM 9. Amend rule 701—12.6(422,423) as follows:

701—12.6(422,423) Sale of business. 12.6(1) Final return due. A retailer selling the business shall file a return within the succeeding month thereafter and pay all tax due. Any unpaid tax shall be due prior to the transfer of title of any personal property to the purchaser and the tax becomes delinquent one month after the sale. 12.6(2) Record retention. A retailer discontinuing business shall maintain the business’s records for a period of five years from the date of discontinuing the business unless a release from this provision is given by the department. See 701—subrule 18.28(2) regarding possible sales and use tax consequences relating to the sale of a business. This rule is intended to implement Iowa Code sections 422.51(2) and 422.52section 423.33.

ITEM 10. Amend rule 701—12.7(422) as follows:

701—12.7(422423) Bankruptcy, insolvency or assignment for benefit of creditors. In cases of bankruptcy, insolvency or assignment for the benefit of creditors by the taxpayer, the taxpayer shall immediately file a return with the tax being due. This rule is intended to implement Iowa Code section 422.51(2)423.31.

ITEM 11. Amend rule 701—12.8(422) as follows:

701—12.8(422423) Vending machines and other coin-operated devices. An operator who places machines on location shall file a return which includes gross receiptsthe sales price from sales from all machines or devices operated by the retailer in Iowa during the period covered by the return. The mandatory beverage container deposit required under the provisions of Iowa Code chapter 455C shall not be considered part of the gross receiptssales price. This rule is intended to implement Iowa Code sections 422.42(16), 422.43, 422.51, and Iowa Code chapter 455C423.1 and 423.2.

ITEM 12. Amend rule 701—12.9(422) as follows:

701—12.9(422423) Claim for refund of tax. 12.9(1) Eligibility for refund; filing claims. Refunds of tax shall be made only to those who have actually paid the tax. A person or persons may designate the retailer who collects the tax as an agent for purposes of receiving a refund of tax. A person or persons who claim a refund shall prepare the claim on the prescribed form furnished by the department.A claim for refund shall be filed with the department, stating in detail the reasons and facts and, if necessary, supporting documents for which the claim for refund is based.A claim for refund shall be filed with the department, stating in detail the reasons and facts and, if necessary, supporting documents for which the claim for refund is based. See 1968 O.A.G. 879. 12.9(2) Denial of refund claim—protest. If the claim for refund is denied, and the person wishes to protest the denial, the department will consider a protest to be timely if filed no later than 60 days following the date of denial. See rule 701—7.8(17A). 12.9(3) Request for abeyance. When a person is in a position of believing that the tax, penalty, or interest paid or to be paid will be found not to be due at some later date, then in order to prevent the statute of limitations from running out, a claim for refund or credit must be filed with the department within the statutory period provided for in Iowa Code section 422.73(1)422.73(2). The claim must be filed requesting that it be held in abeyance pending the outcome of any action which will have a direct effect on the tax, penalty or interest involved. Nonexclusive examples of such action would be: court decisions, departmental orders and rulings, and commerce commission decisions.Y is audited for the same period involving identical materials used to those taxed in the audit of X. However, Y, rather than paying the assessment, takes the department through litigation and wins. The final litigation is not completed until September 30, 1983.X, on October 1, 1983, upon finding out about the decision of Y’s case, files a claim for refund relating to its audit completed in June 1977. The claim will be totally denied as beyond the five-year statute of limitations. However, if X had filed a claim along with payment of its audit in June 1977, and requested that the claim be held in abeyance pending Y’s litigation, then X would have received a full refund of theirits audit liability if the decision in Y’s case was also applicable to X. This rule is intended to implement Iowa Code section 422.73423.45.

ITEM 13. Rescind and reserve rule 701—12.10(423).

ITEM 14. Amend rule 701—12.12(422) as follows:

701—12.12(422423) Extension of time for filing. Upon a proper showing of the necessity for extending the due date, the director is authorized to grant an extension of time in which to file a return. The extension shall not be granted for a period longer than 30 days. The request for the extension must be received on or before the original due date of the return. It will be granted only if the person requesting the extension shall have paid by the twentieth day of the month following the close of such quarter, 90 percent of the estimated tax due. This rule is intended to implement Iowa Code section 422.51423.31.

ITEM 15. Amend rule 701—12.13(422) as follows:

701—12.13(422423) Determination of filing status. 12.13(1) Prior to January 1, 2003. Iowa Code sections 422.51(4) and 422.52 provide, based on the amount of tax collected, how often retailers file deposits or returns with the department (see rule 701—12.1(422)).The department will determine if the retailer’s current filing status is correct by reviewing the most recent four quarters of the retailer’s filing history.The following criteria will be used by the department to determine if a change in filing status is warranted.Filing StatusStatutory RequirementTest CriteriaSemimonthly $4,000 in tax in asemimonthly period.Tax remitted in 3 of most recent 4 quarters exceeds $24,000.Monthly$50 in tax in a month.Tax remitted in 3 of most recent 4 quarters exceeds $150.Annual $120 or less in tax inprior year.Retailer remits $120 or less in tax for last 4 quarters and requests annual filing.SeasonalRetailer remits tax for only 1 quarter during the previous calendar year and requests filing for 1 quarter only.QuarterlyAll other filers.When it is determined that a retailer’s filing status is to be changed, the retailer will be notified and will be given 30 days to provide the department with a written request to prevent the change.Retailers may request that they be allowed to file less frequently than the filing status selected by the department but exceptions will only be granted in two instances: a. Incorrect historical data is used in the conversion. A business may meet the criteria based on initial information available, but, upon investigation, the filing history may prove that the business does not meet the dollar criteria because of adjustments, amended returns, or requests for refunds. b. Data available may have been distorted by the fact that it reflected an unusual pattern in tax collection. The factors causing such a distortion must be documented and approved by department.Exceptions will not be granted in instances where the retailer’s request is based on a decline in business activity, reduction in employees or other potentially temporary business action which will affect current and future reporting.Retailers will be notified in writing of approval or denial of their request for reduced filing periods.Retailers may request that they be allowed to file more frequently than the filing status selected by the department. Approval will be granted based upon justification contained in the retailer’s request. 12.13(2) January 1, 2003, and after. Effective July 1, 2002, the department and the department of management have the authority to change the above-mentioned filing thresholds established by department rule. After review of these filing thresholds, the department has determined that new thresholds are necessary and are to be implemented January 1, 2003. Accordingly, this subrule sets forth the filing thresholds for each filer based on the amount of sales tax collected.Filing StatusThresholdTest CriteriaSemimonthlyGreater than $60,000 in annual state sales tax (more than $2,500 in a semimonthly period).Tax remitted in 3 of most recent 4 quarters examined exceeds $15,000 per quarter.MonthlyBetween $6,000 and $60,000 in annual state sales tax (more than $500 in a monthly period).Tax remitted in 3 of most recent 4 quarters examined exceeds $1,500 per quarter.QuarterlyBetween $120 and $6,000 in annual state sales tax.Tax remitted in 3 of most recent 4 quarters examined exceeds $30 per quarter.AnnualLess than $120 in state sales tax for the prior year.Tax remitted in prior year is less than $120.SeasonalRetailer remits tax for only 1 quarter during the previous calendar year and requests filing for 1 quarter only.A retailer shall be notified in writing when it is determined that a retailer’s filing status will be changed. A retailer has the option of requesting, within 30 days of the date of the department’s notice of a change in filing frequency, that the retailer file more or less frequently than required by the department. A request to file on a less frequent basis than assigned by the department must be in writing and submitted to the department. Once such a written request is filed by the retailer, the department will review the request and issue a written determination to the retailer.A change in assigned filing status to file on a less frequent basis will be granted in only two instances: a. Incorrect historical data is used in the conversion. A business may meet the criteria based on the original filing data, but, upon investigation, the filing history may prove that the business does not meet the dollar criteria because of adjustments, amended returns, or requests for refunds. b. Data available may have been distorted by the fact that the data reflected an unusual pattern in tax collection. The factors causing such a distortion must be documented and approved by the department.A retailer may also request to file more frequently than assigned by the department; the request may be made orally, in person, or by telephone. With the exception of those retailers who previously filed on a quarterly basis and have been changed to an annual filing frequency, any retailer seeking to file on a more frequent basis than assigned shall be required to deposit revenues by electronic funds transfer if the department allows the retailer to file more frequently.The department and the department of management may perform review of filing thresholds every five years or as needed based on department discretion. Factors the departments will consider in determining if the filing thresholds need to be changed include, but are not limited to: tax rate changes, inflation, the need to maintain consistency with required multistate compacts, changes in law, and migration between filing brackets. This rule is intended to implement Iowa Code sections 421.14, 422.51, and 422.52, and sections 422.54 as amended by 2002 Iowa Acts, House File 2622, section 11, and 423.13 as amended by 2002 Iowa Acts, House File 2622, section 14section 423.31.

ITEM 16. Amend rule 701—12.14(422,423) as follows:

701—12.14(422,423) Immediate successor liability for unpaid tax. A retailer ceasing to do business is obligated to prepare a final return and pay all tax due within the time required by law. If a retailer ceasing to do business fails to do this, any immediate successor to the retailer who purchases the business or stock of goods is obligated to withhold from the purchase price enough of the purchase price to pay the tax, interest, or penalty which the retailer owes. Any immediate successor who intentionally fails to withhold sufficient of the purchase price to pay the delinquent tax, interest, and penalty is personally liable for the payment of the tax. However, if the immediate successor’s purchase of the business or stock of goods was made in good faith that the retailer owed no tax, interest, or penalty, then the department may waive the immediate successor’s liability. 12.14(1) Immediate successors having a duty to withhold. Only an immediate successor who, pursuant to a contract of sale, pays a purchase price to a retailer in return for the transfer of a going business or a stock of goods is obligated to inquire if tax, penalty, or interest is due and to withhold a portion of the purchase price if necessary. Persons who fail some aspect of this test, e.g., because they take by operation of law rather than by contract or provide no consideration, are not obligated to investigate or withhold. Nonexclusive examples of persons not so obligated are the following: a. A person foreclosing on a valid security interest. b. A person retaking possession of premises under a valid lease. c. A spouse electing to take under a will. d. A person taking by gift. e. Any other person taking for what would legally be considered “for value” but without the payment of a recognizable “purchase price.”Included within the meaning of the phrase “immediate successor” is a corporation resulting from the action of a sole proprietor who incorporates a business in which the sole proprietor is the only or the controlling shareholder; or a sole proprietorship established from a corporation of which the sole proprietor was the exclusive, majority, or controlling stockholder. 12.14(2) More than one immediate successor. If a retailer sells a business or stock of goods to two or more persons the following rules apply: a. Sale of stock of goods to two or more persons.If a retailer sells a substantial portion of the retail business’s stock of goods to another person who will in turn offer those goods for sale in a retail business, that person is an “immediate successor” and personally liable for payment of tax to the extent of tax, interest, or penalty owed or the amount of the individual purchase price, whichever is the lesser. b. Purchase of differing places of business.If one person owns two or more places of business, each having a separate sales tax permit, each location having its own permit is a separate business and has a separate stock of goods for the purpose of determining successor liability. A person purchasing the business at one location or the stock of goods from one location would be personally liable only for the tax owed under the permit assigned to that location. 12.14(3) “Sale of a retailer’s business” characterized. Usually, the sale of only the machinery or equipment used in a business without the sale or leasing of the realty of the business is not a sale of the business itself. People v. Gabriel, 135 P.2d 378 (Cal. App. 1943). The transfer of a retailer’s machinery or equipment and business realty to a person who continues to use the machinery, equipment, and realty for the sale of any type of tangible personal propertyor specified digital products constitutes the selling of the retailer’s business, and the person to whom the business is sold is an “immediate successor” and liable for tax. 12.14(4) “Good faith” characterized. An immediate successor to a retailer has purchased the retailer’s business or stock of goods “in good faith” if the immediate successor demonstrates, by suitable evidence, that one of the following situations exists. The list of situations is exclusive: a. The department has provided the immediate successor with a certified statement that no delinquent tax, interest, or penalty is unpaid; or b. The immediate successor has taken “in good faith” a certified statement from the licensee, retailer, or seller that no delinquent tax, interest, or penalty is unpaid as of the date of purchase. Immediate successors should not rely upon oral statements from department personnel that no tax, interest, or penalty is unpaid. An immediate successor should request a written statement to this effect. For information regarding delinquent tax, interest, or penalty and tax liens write to: Collections Section Supervisor, Iowa Department of Revenue, P.O. Box 10471, Hoover State Office Building, Des Moines, Iowa 50306. A “certified statement” from a retailer is a statement the truth of which is attested to before a notary public or other officer authorized to take oaths. A certified statement has been taken from a retailer “in good faith” if the immediate successor, in the exercise of due diligence, had no reason to believe a retailer’s statement was false or no reason to question the truth of the retailer’s statement. This rule is intended to implement Iowa Code section 421.28423.33.

ITEM 17. Amend rule 701—12.15(422,423), parenthetical implementation statute, as follows:

701—12.15(422,423) Officers and partners—personal liability for unpaid tax.

ITEM 18. Amend rule 701—12.16(422), parenthetical implementation statute, as follows:

701—12.16(422423) Show sponsor liability.

ITEM 19. Amend rule 701—12.16(422), implementation sentence, as follows: This rule is intended to implement the requirements of Iowa Code section 422.52423.33.

ITEM 20. Rescind and reserve rules 701—12.18(423) and 701—12.20(423).

ITEM 21. Amend rule 701—13.1(422) as follows:

701—13.1(422423) Retail sales tax permit required. When used in this chapter or any other chapter relating to retail sales, the word “permit” shall mean “a retail sales tax permit.”A person shall not engage in any Iowa businessmake taxable sales of taxable tangible personal property, specified digital products, or services subject to tax until the person has procured a permit except as provided in 13.5(422)rule 701—13.5(423). There is no charge for a retail sales tax permit. If a person makes retail sales from more than one location, each location from which taxable sales of tangible personal property, specified digital products, or services will occur shall be required to hold a permit. Retail sales tax permits are issued to retailers for the purpose of making retail sales of tangible personal property, specified digital products, or taxable services. Persons shall not make applicationapply for a permit for any other purpose. For details regarding direct pay permits, see rule 701—12.3(422423). This rule is intended to implement Iowa Code section 422.53 as amended by 1999 Iowa Acts, chapter 152423.36.

ITEM 22. Amend rule 701—13.2(422) as follows:

701—13.2(422423) Application for permit. 13.2(1) Permit application. An application for a permanent permit shall be made upon a form provided by the department, and the applicant shall furnish all information requested on such form.An application for a permit for a business operating under a trade name shall state the trade name, as well as the individual owner’s name, in the case of a sole ownership by an individual, or the trade name and the name of all partners, in the case of a partnership.An application for a permit for a business operating under a trade name shall state the trade name, as well as the individual owner’s name, in the case of a sole ownership by an individual, or the trade name and the name of all partners, in the case of a partnership. 13.2(2) Signatures required. a. Paper applications.The application shall be signed by the owner, in the case of an individual business; by a partner, in the case of a partnership, although all partners’ names shall appear on the application; and by the president, vice president, treasurer or other principal officer of a corporation or association, unless written authorization is given by the officers for another person to sign the application. b. Electronic applications.For electronically transmitted applications, the application form shall state that in lieu of a person’s handwritten signature, the E-mailemail address will constitute a valid signature. 13.2(3) Date when sales begin. The application shall state the date when the applicant will begin selling tangible personal property, specified digital products, or taxable services at retail in Iowa from the location for which the application is made. This rule is intended to implement Iowa Code sections 421.17(15) and 422.53section 423.36.

ITEM 23. Amend rule 701—13.3(422) as follows:

701—13.3(422423) Permit not transferable—sale of business. Permits shall not be transferable. A permit holder selling the business shall cancel the permit, and the purchaser of the business shall apply for a new permit in the purchaser’s own name. This rule is intended to implement Iowa Code section 422.53423.36.

ITEM 24. Amend rule 701—13.4(422) as follows:

701—13.4(422423) Permit—consolidated return optional. Two types of permit holders have the option of filing a consolidated return. The first is a permit holder with multiple locations from which taxable sales are made and the second is certain affiliated corporations. 13.4(1) Permit holders with multiple locations. a. Permit holder option.A permit holder procuring more than one permit may file a separate return for each permit; or, if arrangements have been made with the department, the permit holder may file one consolidated return reporting sales made at all locations for which a permit is held. b. Filing a consolidated return.Effective July 1, 2002, inIn order to file a complete consolidated sales tax return, the taxpayer must file a form entitled Schedule of Consolidated Business Locations with its quarterly sales tax return, and the schedule must include all of the following items: (1) the taxpayer’s consolidated permit number; (2) the permit number for each Iowa location; (3) the amount of state sales tax by business location; and (4) the amount of state sales tax due on goods consumed that are not assigned to a specific business location. Failure by the taxpayer to file a Schedule of Consolidated Business Locations form with a quarterly sales tax return will result in theconsideration of the quarterly return’s being consideredreturn as incomplete, and the taxpayer will be subject to the penalty provisions set forth in Iowa Code section 421.27. 13.4(2) Affiliated corporations. a. Application by affiliate group.Any group consisting of a parent and its affiliates, which is entitled to file a consolidated return for federal income tax purposes and which makes retail sales of tangible personal property, specified digital products, or taxable enumerated services, may make application to the director for permission to make deposits and file a consolidated Iowa sales tax return. An application for consolidation can be made for any tax period beginning on or after January 1, 2000.The application shall be in writing and shall be signed by an officer of the parent corporation. It shall contain the business name, address, federal identification number, and Iowa sales tax identification number of every corporation seeking the right to file a consolidated return. The application shall state the initial tax period for which the right to file a consolidated return is sought and shall be filed no later than 90 days prior to the beginning of that period. The application shall also contain any additional relevant information which the director may, in individual instances, require.The application shall be in writing and shall be signed by an officer of the parent corporation. It shall contain the business name, address, federal identification number, and Iowa sales tax identification number of every corporation seeking the right to file a consolidated return. The application shall state the initial tax period for which the right to file a consolidated return is sought and shall be filed no later than 90 days prior to the beginning of that period. The application shall also contain any additional relevant information which the director may, in individual instances, require. b. Joint and several liability.A parent corporation and each affiliate corporation that file a consolidated return are jointly and severally liable for all tax, penalty, and interest found due for the tax period for which a consolidated return is filed or required to be filed. 13.4(3) Requirements common to returns filed under subrules 13.4(1) and 13.4(2). Taxpayers shall file consolidated returns only on forms provided by the department. All working papers used in the preparation of the information required to complete the returns must be available for examination by the department. Undercollections of sales tax at one or more locations or by one or more affiliates may not be offset by overcollections at other locations or by other affiliates. This rule is intended to implement Iowa Code section 422.51 as amended by 2002 Iowa Acts, Senate File 2305, section 8, and Iowa Code section 422.53423.31.

ITEM 25. Strike “422” wherever it appears in rules 701—13.5(422), 701—13.6(422), 701—13.8(422), 701—13.10(422), 701—13.11(422), 701—13.14(422) and 701—13.15(422) and insert “423” in lieu thereof.

ITEM 26. Amend rule 701—13.5(422), implementation sentence, as follows: This rule is intended to implement Iowa Code section 422.53(6)423.36.

ITEM 27. Amend rule 701—13.6(422), implementation sentence, as follows: This rule is intended to implement Iowa Code section 422.53423.36.

ITEM 28. Amend rule 701—13.7(422) as follows:

701—13.7(422423) Reinstatement of revoked permit. A revoked permit shall be reinstated only on such terms and conditions as the case may warrant. Terms and conditions include payment of any tax liability which may be due to the department. See rule 13.17(422)701—13.17(423) for a description of the circumstances under which nonpayment of taxes may lead to revocation of a permit.Pursuant to the director’s statutory authority in Iowa Code section 422.53(5)423.36(6) to restore licenses after a revocation, the director has determined that upon the revocation of a sales tax permit the initial time, the permit holder will be required to pay all delinquent sales tax liabilities, to file returns, and to post a bond and to refrain from taxable occurrences under Iowa Code section 422.43423.2 as required by the director prior to the reinstatement or issuance of a new sales tax permit.As set forth above, the director may impose a waiting period during which the permit holder must refrain from taxable occurrences pursuant to the penalties of Iowa Code section 422.58(2)423.40, not to exceed 90 days to restore a permit or issue a new permit after a revocation. The department may require a sworn affidavit, subject to the penalties of perjury, stating that the permit holder has fulfilled all requirements of said order of revocation, and stating the dates on which the permit holder refrained from taxable occurrences.Each of the following situations will be considered one offense, for the purpose of determining the waiting period to reinstate a revoked permit or issue a new permit after a revocation unless otherwise noted.Failure to post a bond as required.Failure to file a quarterly return or monthly deposit timely.Failure to pay tax timely (including unhonored checks, failure to pay, and late payments).Failure to file a quarterly return or a monthly deposit and pay tax shown on the return or deposit timely (counts as two offenses).The administrative law judge or director of revenue may order a waiting period after the revocation not to exceed:Five days for one through five offenses.Seven days for six through seven offenses.Ten days for eight through nine offenses.Thirty days for ten offenses or more.The administrative law judge or director of revenue may order a waiting period not to exceed:Forty-five days if the second revocation occurs within 24 months of the first revocation.Sixty days if the second revocation occurs within 18 months of the first revocation.Ninety days if the second revocation occurs within 12 months of the first revocation.Ninety days if the third revocation occurs within 36 months of the second revocation.A revoked permit will not be reinstated if the department has received a certificate of noncompliance from the child support recovery unit in regard to the permit holder, who is an individual requesting reinstatement, until the unit furnishes the department with a withdrawal of the certificate of noncompliance. This rule is intended to implement Iowa Code sections 422.53 and 422.58(2) and 1995 Iowa Acts, chapter 115423.2, 423.36, and 423.40.

ITEM 29. Rescind and reserve rule 701—13.9(422).

ITEM 30. Amend rule 701—13.10(422), implementation sentence, as follows: This rule is intended to implement Iowa Code section 422.53 as amended by 2001 Iowa Acts, House File 715423.36.

ITEM 31. Amend rule 701—13.11(422), implementation sentence, as follows: This rule is intended to implement Iowa Code section 422.53423.36.

ITEM 32. Rescind and reserve rule 701—13.12(422).

ITEM 33. Amend rule 701—13.13(422) as follows:

701—13.13(422423) Trustees, receivers, executors and administrators. By virtue of their appointment, trustees, receivers, executors and administrators who continue to operate, manage or control a business involving the sale of tangible personal property, specified digital products, or taxable services or engage in liquidating the assets of a business by means of sales made in the usual course of trade shall collect and remit tax on inventory and noninventory items. In Re Hubs Repair Shop, Inc. 28 B.R. 858 (Bkrtcy 1983).A permit of a ward, decedent, cestui que trust, bankrupt, assignor or debtor for whom a receiver has been appointed, which is valid at the time a fiduciary relation is created, shall continue to be a valid permit for the fiduciary to continue the business for a reasonable time or to close out the business for the purpose of settling an estate or terminating or liquidating a trust.A permit of a ward, decedent, cestui que trust, bankrupt, assignor or debtor for whom a receiver has been appointed, which is valid at the time a fiduciary relation is created, shall continue to be a valid permit for the fiduciary to continue the business for a reasonable time or to close out the business for the purpose of settling an estate or terminating or liquidating a trust. This rule is intended to implement Iowa Code sections 422.42(1) and 422.53section 423.36.

ITEM 34. Amend rule 701—13.14(422), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 422.43 and 422.53 as amended by 1986 Iowa Acts, House File 2471, and Iowa Code section 422.42section 423.36.

ITEM 35. Amend rule 701—13.15(422), implementation sentence, as follows: This rule is intended to implement Iowa Code chapter 422section 423.36.

ITEM 36. Amend rule 701—13.16(422) as follows:

701—13.16(422423) Substantially delinquent tax—denial of permit. 13.16(1) Substantial delinquency of tax. a. Applicant identity.The department may deny a permit to any applicant who is, at the time of application, substantially delinquent in paying any tax due which is administered by the department or the interest or penalty on the tax. If the applicant is a partnership, a permit may be denied if a partner is substantially delinquent in paying any tax, penalty, or interest regardless of whether the tax is in any way a liability of or associated with the partnership. If an applicant for a permit is a corporation, the department may deny the applicant a permit if any officer, with a substantial legal or equitable interest in the ownership of the corporation, owes any delinquent tax, penalty, or interest of the applicant corporation. In this latter instance, the corporation must, initially, owe the delinquent tax, penalty, or interest, and the officer must be personally and secondarily liable for the tax. This is in contrast to the situation regarding a partnership. b. Tax administered by the department.The local option sales and service tax is a tax administered by the department. Local vehicle, property, whether imposed on centrally assessed property or not, beer and liquor, and insurance premium taxes are nonexclusive examples of taxes which are not administered by the department. 13.16(2) Substantial delinquency factors. The amount of tax delinquent, the number of filing periods for which a tax remains due and unpaid, and the length of time a tax has been unpaid are the principal, but nonexclusive circumstances, which the department will use to determine whether an applicant is “substantially” or insubstantially delinquent in paying a tax. The department may deny a permit for substantial delinquency. Nonexclusive factors which the department will consider in determining whether substantial delinquency will or will not result in the denial of an application for a permit are the following: whether the delinquency was inadvertent, negligent, or intentional; the amount of tax, interest, or penalty owed in relation to the applicant’s total financial resources; and whether the applicant’s business is likely to survive over the long term if a license or permit is granted. This rule is applicable to tax, interest, and penalty due and payable on and after January 1, 1987. 13.16(3) Child support noncompliance. The department will deny a permit to any applicant, who is an individual, if the department has received a certificate of noncompliance from the child support recovery unit in regard to the individual, until the unit furnishes the department with a withdrawal of the certificate of noncompliance. This rule is intended to implement Iowa Code subsection 422.53(2) and 1995 Iowa Acts, chapter 115section 423.36.

ITEM 37. Amend rule 701—13.17(422) as follows:

701—13.17(422423) Substantially delinquent tax—revocation of permit. The department may revoke a permit if the permit holder has become substantially delinquent in paying any tax which is administered by the department or the interest or penalty on the tax. If the person holding a permit is a corporation, the department may revoke the permit if any officer, with a substantial legal or equitable interest in the ownership of the corporation, owes any delinquent tax, penalty, or interest of the permit-holding corporation. In this latter instance, the corporation must, initially, owe the delinquent tax, penalty, or interest, and the officer must be personally and secondarily liable for the tax. If the permit holder is a partnership, a permit cannot be revoked for a partner’s failure to pay a tax which is not a liability of the partnership. This is in contrast to the situation regarding an application for a permit. See rule 13.16(422)701—13.16(423). Also, see rule 13.16(422)701—13.16(423) for characterizations of the terms “tax administered by the department” and “substantially delinquent” and for a description of some of the factors which the department will use in determining whether substantial delinquency will or will not result in the revocation of a permit. This rule is applicable to tax, interest, and penalty due and payable on and after January 1, 1987.A revoked permit will not be reinstated if the department has received a certificate of noncompliance from the child support recovery unit in regard to the permit holder who is an individual requesting reinstatement, until the unit furnishes the department with a withdrawal of the certificate of noncompliance. This rule is intended to implement Iowa Code subsection 422.53(5) and 1995 Iowa Acts, chapter 115section 423.36.

ITEM 38. Rescind and reserve rules 701—14.1(422) and 701—14.2(422,423,77GA,ch1130).

ITEM 39. Amend rule 701—14.3(422,423) as follows:

701—14.3(422,423) Taxation of transactions due to rate change. The following provisions shall apply in determining whether or not a transaction is subject to an existing rate of sales or use tax or to a new rate of sales or use tax. In the examples contained in the rest of this rule, assume that a bill has been enacted into law which increases the sales and use tax rate from 46 to 57 percent and that the effective date of this bill is July 1. 14.3(1) General principles. A change in the sales tax rate applies to a sale of tangible personal propertyand specified digital products if delivery of the propertyor product under a contract of sale occurs on or after the effective date of the legislation which changes the rate of taxation. Harold D. Sturtz v. Iowa Department of Revenue, 373 N.W.2d 131 (Iowa 1985). See also Crown Iron Works v. Commissioner of Taxation, 214 N.W.2d 462 (Minn. 1974). The intent of the parties to the contract for sale determines when delivery occurs. However, in the event the intent is not readily established from the contract, the rules set out in the Uniform Commercial Code (Iowa Code chapter 554) shall apply in order to determine the place of delivery.In the examples below, so long as delivery under a contract for sale occurs on or after July 1, the 57 percent sales tax rate applies. It is not necessary that any other aspects of the sale, such as payment for the delivered property, occur on or after that date.In the three examples immediately below, “delivery” is physical transfer of possession of the tangible personal property directly from the seller to the purchaser. However, see subrule 14.3(2) for examples of delivery which do not involve transfer of possession directly from the buyer to the seller, and subrule 14.3(3) which explains a type of delivery which does not involve any physical transfer of possession of property. 14.3(2) Shipment by carrier. The following principles shall be used to determine the conditions under which delivery is made pursuant to a contract for sale when the retailer utilizes a carrier to ship tangible personal property to a purchaser. If the contract for sale makes no reference of an F.O.B. (free on board) or F.A.S. (free along side) point or of any other point at which title and risk of loss with regard to the tangible personal property are transferred from the retailer to the purchaser and contains no other indication of a delivery point, it shall be presumed that delivery of the property occurs when the seller transfers possession of the property to the carrier. If property is sold under a C.I.F. (cost, insurance and freight) or a C. & F. (cost and freight) contract, it shall also be presumed that delivery occurs when the retailer transfers possession of the property to the carrier. If a contract for sale makes mention of an F.O.B. or F.A.S. point, it shall be presumed that the parties intended delivery of the property at the time the property reaches that point. 14.3(3) Constructive delivery. “Constructive delivery” has occurred if the retailer and the purchaser agree that title, risk of loss, and right of possession to tangible personal property have passed from the retailer to the purchaser; that is, the parties agree that a sale has occurred, but actual physical possession of the property remains with the retailer or someone other than the buyer after the sale. If parties to a contract of sale have agreed upon constructive delivery, the sale occurs at the time of constructive delivery and not at the time of transfer of physical possession of the property from buyer to seller or at an F.O.B., F.A.S., or similar type of point. 14.3(4) Conditional sales. A “conditional sale” is no different from an absolute sale, except in the matter of payment. Hansen v. Kuhn, 284 N.W. 249, 226 Iowa 794 (1939). A conditional sale has not occurred until delivery under a contract of conditional sale has occurred. Greenlease-Lied Motors v. Sadler, 249 N.W. 383, 216 Iowa 302 (1933); Universal Credit Co. v. Mamminga, 243 N.W. 513, 214 Iowa 1135 (1932); and Firestone Tire & Rubber Co. v. Anderson, 180 N.W. 273, 190 Iowa 439 (1920). See Example C in subrule 14.3(1) for an example of a conditional sales contract in which delivery of the property under the contract occurred long after the making of the contract and after the buyer had made several payments under the contract. As soon as delivery has occurred, tax on all gross receiptsthe sales price of the sale is due to the department. See rules 701—15.1(422) andrule 701—16.47(422423) for additional material ondiscussion of conditional sales. 14.3(5) Use tax—changed rate of taxation on the use of tangible personal propertyand specified digital products. A changed use tax rate applies to the use of tangible personal propertyand specified digital products in Iowa when the first taxable use occurs on or after the effective date of the legislation which changes the rate of tax. In the following example, assume that the change in the use tax rate is from 46 to 57 percent and that the legislation which enacts this change is effective as of July 1. 14.3(6) Changed rate for the sales tax on enumerated services. A changed sales tax rate on enumerated services applies if services are rendered, furnished, or performed in Iowa on or after the effective date of the legislation which changes the rate. The date upon which the parties enter into a service contract is not of importance in determining whether the old rate or new rate is applicable. Nor, for the purpose of computing the sales tax, is it important to know when the product or result of the service is used by the ultimate user. This situation must be distinguished from the application of use tax to services. For use tax purposes, the date when the product or result of the service is used may be important. See subrule 14.3(7). For the purposes of this subrule and subrules 14.3(7), 14.3(8),and 14.3(9) and 14.3(10), assume that the rate of tax is being raised from 46 to 57 percent and that the effective date of the legislation which increases the rate is July 1. 14.3(7) Changed rate of use tax on services. If the product or result of a taxable service rendered, furnished, or performed outside of this state is first used in this state on or after July 1, the 57 percent use tax rate applies. 14.3(8) Service contracts requiring periodic payments. If parties enter into a service contract prior to July 1, and the contract requires periodic payments, payments made on or after July 1 under the contract are subject to the 57 percent sales or use tax rate. 14.3(9) Gas, electricity, water, heat, solid waste collection, sewer, pay television, and communication services. Gross receiptsThe sales price from the sales, furnishing, or service of gas, electricity, water, heat, and communication service are subject to the sales, services, and use tax at the 57 percent rate when the date of billing the customer falls on or after July 1. The gross receiptssales price from the services of solid waste collection and disposal, sewer, and pay television are also treated in this manner.If the date set forth in the tariff had been the last day of the month, then a self-billing attributable to June 30 would require payment of sales tax at the 46 percent rate.If, in this example, the billing date on the bill had been July 1, the sales tax should be billed at the rate of 57 percent for all telephone services, local and intrastate long distance. 14.3(10) Vehicles subject to registration. The 5 percent use tax rate applies to motor vehicles subject to registration when the purchaser of the vehicle registers the vehicle on or after July 1. This rule is intended to implement Iowa Code sections 422.43 andsection 423.2.

ITEM 40. Rescind and reserve rules 701—15.1(422) and 701—15.2(422,423).

ITEM 41. Amend rule 701—15.3(422,423), parenthetical implementation statute, as follows:

701—15.3(422,423) Exemption certificates, direct pay permits, fuel used in processing, and beer and wine wholesalers.

ITEM 42. Amend subrules 15.3(1) and 15.3(2) as follows: 15 15.3 3(1) General provision. The gross receiptssales price from the sale of tangible personal propertyor specified digital products to a purchaser for any exempt purpose are not subject to tax as provided by the Iowa sales and use tax statutes. In addition, a seller of tangible personal propertyor specified digital products need not collect Iowa sales or use tax from a purchaser that possesses a valid direct pay permit issued by the department of revenue. However, the following are requirements for the exemption and noncollection of tax by a seller when a direct pay permit is involved: a. Prior to July 1, 2004, the sales tax liability for all sales of tangible personal property was upon the seller unless the seller took in good faith from the purchaser a valid exemption certificate stating that the purchase was for an exempt purpose or the tax would be remitted directly to the department by the purchaser under a valid direct pay permit issued by the department. In addition to the provisions and requirements set forth in subrule 15.3(2), to be valid an exemption certificate issued by a purchaser to a seller in good faith under a direct pay permit must have included the purchaser’s name, direct pay permit number, and date the direct pay permit was issued by the department. A seller who has taken a valid exemption certificate under a direct pay permit must keep records of sales made in accordance with rule 701—11.4(422,423). For more information regarding direct pay permits, see rule 701—12.3(422). Where tangible personal property or services have been purchased tax-free pursuant to a valid exemption certificate which was taken in good faith by the seller, and the tangible personal property or services were used or disposed of by the purchaser in a nonexempt manner, or the purchaser failed to pay tax to the department under a direct pay permit issued by the department, the purchaser was solely liable for the taxes and must remit the taxes directly to the department.When a processor or fabricator purchases tangible personal property exempt from the sales or use tax and subsequently withdraws the tangible personal property from inventory for its own taxable use or consumption, the tax shall be reported in the period when the tangible personal property was withdrawn from inventory. b. a. As of July 1, 2004, the requirement of “good faith” on the part of a seller is replaced by a different standard. For sales occurring on and after that date, theThe sales tax liability for all sales of tangible personal property and all sales of, specified digital products, and taxable services is upon the seller and the purchaser unless the seller takes from the purchaser a valid exemption certificate stating under penalty of perjury that the purchase is for a nontaxable purpose and is not a retail sale, or the seller is not obligated to collect tax due, or unless the seller takes a fuel exemption certificate. If the tangible personal property, specified digital products, or services are purchased tax-free pursuant to a valid exemption certificate and the tangible personal property, specified digital products, or services are used or disposed of by the purchaser in a nonexempt manner, the purchaser is solely liable for the taxes and shall remit the taxes directly to the department. The protection afforded a seller by this paragraph does not apply to a seller who fraudulently fails to collect tax or to a seller who solicits purchasers to participate in the unlawful claiming of an exemption. c. b. The director is required to provide exemption certificates to assist retailers in properly accounting for nontaxable sales of tangible personal property, specified digital products, or services to buyers for exempt purposes. These exemption certificates must be completed as to the information required on the form in order to be valid. 15 15.3 3(2) Retailer-provided exemption certificates. Retailers may provide their own exemption certificates. Those exemption certificates must contain information required by the department, including, but not limited to: the seller’s name, the buyer’s name and address, the buyer’s nature of business (wholesaler, retailer, manufacturer, lessor, other), the reason for purchasing tax-exempt (e.g., resale or processing), the general description of the products purchased, and state sales tax or I.D. registration number. The certificate must be signed and dated by the buyer. a. An exemption certificate or blanket exemption certificate as referred to in paragraph “b” cannot be used to make a tax-free purchase of any tangible personal property, specified digital products, or service not covered by the certificate. For example, the certificate used to purchase a chemical consumed in processing cannot be used to purchase a generator which is going to become an integral part of other tangible personal property which will be ultimately sold at retail. b. Any person repeatedly selling the same type of property or service to the same purchaser for resale, processing, or for any other exempt purpose may accept a blanket certificate covering more than one transaction. A seller who accepts a blanket certificate is required periodically to inquire of the purchaser to determine if the information on the blanket certificate is accurate and complete. Such an inquiry by the seller shall be deemed evidence of good faith on the part of the seller. c. When due to extraordinary circumstances in the nature of fire, flood, or other cases of destruction beyond the taxpayer’s control, a seller does not have an exemption certificate on file, the seller may show by other evidence, such as a signed affidavit by the purchaser, that the property or service was purchased for an exempt purpose. d. The liability for the tax does not shift from the seller to the purchaser if the seller has not accepted a valid exemption certificate in good faith. If the seller has actual knowledge of information or circumstances indicating that it is unlikely that the property or services will be used by the purchaser in an exempt manner, then in order to act in good faith the seller must make further inquiry to determine the facts supporting the exemption certificate. In addition, if the nature of the business of the purchaser, as shown by the exemption certificate, indicates that it is unlikely that the property or services will be used in an exempt manner, then in order to act in good faith the seller must make further inquiry to determine the facts supporting the exemption certificate.If the seller has met the requirements set forth above in accepting a valid exemption certificate, the seller shall be deemed to have acted in good faith and the liability for the tax shifts to the purchaser who becomes solely liable for the taxes. e. A seller is relieved from liability for sales tax if (1) a purchaser deletes the tax reimbursement from the payment to the seller or if the purchaser makes a notation on an invoice such as “not subject to tax” or “resale” and (2) if the seller can produce written evidence to show that an attempt was made to obtain an exemption certificate to show that the transaction was exempt from tax but was unable to obtain said certificate from the purchaser. f. The failure of a permit holder to act in good faith while giving or receiving exemption certificates may result in the revocation of the sales tax permit. Revocation is authorized under the provisions of Iowa Code section 422.53(5)423.36. g. The purchase of tangible personal property, specified digital products, or services which are specifically exempt from tax under the Iowa Code need not be evidenced by an exemption certificate. However, if certificates are given to support these transactions, they do not relieve the seller of the responsibility for tax if at some later time the transaction is determined to be taxable. h. A person who is selling tangible personal property, specified digital products, or services, but who is not making taxable sales at retail, shall not be required to hold a permit. When this person purchases tangible personal property, specified digital products, or services for resale, the person shall furnish a certificate in accordance with these rules to the supplier stating that the property or services was purchased for the purpose of resale. i. For information regarding the use of exemption certificates for contractors, see 701—Chapter 19.

ITEM 43. Amend paragraph 15.3(3)"a", definition of “Fuel consumed in processing,” as follows: "Fuel consumed in processing" includes fuel used in grain drying or providing heat or cooling for livestock buildings, fuel used for generating electric current, fuel consumed in implements of husbandry engaged in agricultural production, as well as fuel used in “processing” as defined in rules 701—18.29(422,423), 701—18.58(422,423), and 701—230.15(423). See rule 701—17.2(422423) for a detailed description of “fuel used in processing.” See rule 701—17.3(422,423) for extensive discussion regarding electricity and steam used in processing.

ITEM 44. Amend rule 701—15.3(422,423), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 422.42(3), 422.42(13), 422.42(16), 422.47, 422.53 as amended by 1997 Iowa Acts, House File 266, and 423.1(1)423.3, 423.36 and 423.45.

ITEM 45. Rescind and reserve rules 701—15.4(422,423) to 701—15.6(422,423).

ITEM 46. Amend rule 701—15.8(422,423) as follows:

701—15.8(422,423) Returned merchandise. When merchandise is sold and returned by a customer who secures an allowance or a return of the full purchase price, the seller may deduct the amount allowed as full credit or refund, provided the merchandise is taxable merchandise and tax has been previously paid on the gross receiptssales price.An allowance shall not be made for the return of any merchandise which (1) is exempt from either sales or use tax; or (2) has not been reported in the taxpayer’s gross receipts and tax previously paid. This rule is intended to implement Iowa Code sections 422.42(6) and 423.1(3)section 423.31.

ITEM 47. Rescind and reserve rules 701—15.9(422) and 701—15.10(422).

ITEM 48. Amend rule 701—15.11(422,423), parenthetical implementation statute, as follows:

701—15.11(422,423) Leased departments.

ITEM 49. Amend rule 701—15.11(422,423), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 422.68(1) and 423.23section 423.25.

ITEM 50. Amend rule 701—15.12(422,423), parenthetical implementation statute, as follows:

701—15.12(422,423) Excise tax included in and excluded from gross receipts.

ITEM 51. Amend rule 701—15.12(422,423), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 422.42(6), 422.43, 423.1,423.1 and 423.2.

ITEM 52. Amend rule 701—15.13(422,423) as follows:

701—15.13(422,423) Freight, other transportation charges, and exclusions from the exemption applicable to these services. The determination of whether freight and other transportation charges shall be subject to sales or use tax is dependent upon the terms of the sale agreement. 15.13(1) Charges separately stated. When tangible personal property or a taxable service is sold at retail in Iowa or purchased for use in Iowa and under the terms of the sale agreement the seller is to deliver the property to the buyer or the purchaser is responsible for delivery and such delivery charges are stated and agreed to in the sale agreement or the charges are separate from the sale agreement, the gross receipts derived fromsales price of the freight or transportation charges shall not be subject to tax. As of May 20, 1999, thisThis exemption does not apply to the service of transporting electrical energy. As of April 1, 2000, this exemption does not apply toor the service of transporting natural gas. 15.13(2) Charges not separately stated. When freight and other transportation charges are not separately stated in the sale agreement or are not separately sold, the gross receipts fromsales price of the freight or transportation charges become a part of the gross receipts fromsales price of the sale of tangible personal property or a taxable service and are subject to tax. Where a sales agreement exists, the freight and other transportation charges are subject to tax unless the freight and other transportation charges are separately contracted. If the written contract contains no provisions separately itemizing such charge, tax is due on the full contract price with no deduction for transportation charge, regardless of whether or not such transportation charges are itemized separately on the invoice. Clarion Ready Mixed Concrete Company v. Iowa State Tax Commission, 252 Iowa 500, 107 N.W.2d 553(1961); Schemmer v. Iowa State Tax Commission, 254 Iowa 315, 117 N.W.2d 420(1962); City of Ames v. Iowa State Tax Commission, 246 Iowa 1016, 71 N.W.2d 15(1959); Dain Mfg. Company v. Iowa State Tax Commission, 237 Iowa 531, 22 N.W.2d 786(1946). 15.13(3) Exemption. Effective July 1, 2001, gross receiptsThe sales price from charges for delivery of electricity or natural gas are exempt from tax to the extent that the gross receiptssales price from the sale, furnishing, or service of electricity or natural gas or its use are exempt from sales or use tax under Iowa Code chapters 422 andchapter 423.The exclusions from this exemption relating to the transportation of natural gas and electricity are applicable to all contracts for the performance of these transportation services. Below are examples which explain some of the principal circumstances in which the transport of natural gas or electricity is a service subject to tax.The exclusions from this exemption relating to the transportation of natural gas and electricity are applicable to all contracts for the performance of these transportation services. Below are examples which explain some of the principal circumstances in which the transport of natural gas or electricity is a service subject to tax.Freight and transportation charges include, but are not limited to, the following charges or fees: freight; transportation; shipping; delivery; or trip charges. This rule is intended to implement Iowa Code sections 422.43 and 423.2, and section 422.45 as amended by 2001 Iowa Acts, House File 705and 423.3.

ITEM 53. Rescind and reserve rule 701—15.14(422,423).

ITEM 54. Amend rule 701—15.15(422) as follows:

701—15.15(422423) Premiums and gifts. A person who gives away or donates tangible personal property, specified digital products, or taxable services shall be deemed to be a consumer of such property, products, or services for tax purposes. The gross receiptssales price from the sale of tangible personal property, specified digital products, or taxable services to such persons for such purposes shall be subject to tax.When a retailer purchases tangible personal property, a specified digital product, or a taxable service, exclusive of tax, for the purpose of resale in the regular course of business and later gives it away or donates it, the retailer shall include in the return the value of the property, product, or service at the retailer’s cost price.When a retailer sells tangible personal property, specified digital products, or taxable services and furnishes a premium with the property, product, or service sold, the retailer is considered to be the ultimate consumer or user of the premium furnished. This rule is intended to implement Iowa Code sections 422.42 and 422.43423.1 and 423.2.

ITEM 55. Rescind and reserve rules 701—15.16(422) to 701—15.20(422,423).

ITEM 56. Rescind and reserve rule 701—17.21(422).

ITEM 57. Amend rule 701—30.6(423) as follows:

701—30.6(423) Bracket system to be used by registered vendors. A registered vendor who has occasion to sell tangible personal property or enumerated services rendered, furnished or performed in Iowa or products or results of enumerated taxable services rendered, furnished or performed may use the bracket system specified in 701—14.2(422)maintained by the department, which was adopted under the provisions of the Iowa retail sales tax law.The registered seller shall be required to remit tax to the department at the current rate applied to the purchase price of all taxable property or enumerated services rendered, furnished or performed in Iowa or the products or results of all enumerated taxable services sold.The registered seller shall be required to remit tax to the department at the current rate applied to the purchase price of all taxable property or enumerated services rendered, furnished or performed in Iowa or the products or results of all enumerated taxable services sold. This rule is intended to implement Iowa Code sections 422.68(1),section 423.2 and 423.23.

ITEM 58. Amend rule 701—40.77(422) as follows:

701—40.77(422) Exclusion of biodiesel production refund. A taxpayer may exclude, to the extent included in federal adjusted gross income, the amount of the biodiesel production refund described in rule 701—12.18(423)701—250.1(423). This rule is intended to implement Iowa Code section 422.7 as amended by 2011 Iowa Acts, Senate File 531.

ITEM 59. Amend rule 701—53.26(422) as follows:

701—53.26(422) Exclusion of biodiesel production refund. A taxpayer may exclude, to the extent included in federal taxable income, the amount of the biodiesel production refund described in rule 701—12.18(423)701—250.1(423). This rule is intended to implement Iowa Code section 422.35 as amended by 2011 Iowa Acts, Senate File 531.

ITEM 60. Amend subrule 108.2(6) as follows: 108.2(6) Administration of the tax. The local option school infrastructure sales and service tax is to be imposed on the gross receipts of sales of tangible personal property sold within the local option jurisdiction and upon the gross receipts from services rendered, furnished, or performed within the local option jurisdiction. This tax may only be imposed by a county in the manner set forth previously in this rule. The tax may not be imposed on any transaction not subject to state sales tax. Effective May 1, 1999, transactions involving the use of natural gas, natural gas services, electricity or electric service are subject to a local excise tax that is to be imposed on the same basis as the state use tax, unless the sale or use involved in such transactions is subject to a franchise fee or user fee during the period the franchise fee or user fee is imposed. Except as otherwise provided in this chapter, all references to local option school infrastructure tax also include local excise tax and all rules governing the administration and collection of local option school infrastructure tax are also applicable to local excise tax. For further details, see 701—108.5(422E). With the exception of the natural gasgas- and electric relatedelectric-related transactions previously mentioned, there is no local option use tax. See rule 701—14.2(422,423) for a tax table setting forth the combined rate for a state sales tax of 5 percent and the local sales tax rate of 1 percent. Frequency of deposits and quarterly reports of local option tax filed with the department of revenue are governed by the retail sales tax provisions found in Iowa Code section 422.52423.31. Local option tax collections shall not be included in the computation of the total tax to determine the frequency of the filing under Iowa Code section 422.52423.31.Prior to April 1, 2000, a local option school infrastructure tax cannot be imposed until 40 days after there has been a favorable election to impose the tax. All local option school infrastructure tax must be imposed January 1, April 1, July 1, or October 1. The tax can be repealed only on March 31, June 30, September 30, or December 31. However, this tax must not be repealed before the tax has been in effect for one year. For imposition and repeal date restrictions on or after April 1, 2000, see subrule 108.2(3).

ITEM 61. Amend rule 701—213.16(423) as follows:

701—213.16(423) Repossessed goods. 213.16(1) Sale subject to tax. When tangible personal property which has been repossessed either by the original seller or by a finance company is resold to final users or consumers, the sales price from those sales is subject to tax. 213.16(2) Bad debts. A retailer repossessing previously sold merchandise shall be entitled to claim a credit on tax paid for bad debts in the same fashion as any other retailer that has paid tax to the department upon a sales price which ultimately constitutes a bad debt. Reference rule 701—15.4(422,423) for a description of the circumstances under which bad debts are and are not allowed as a credit on tax paid. This rule is intended to implement Iowa Code sections 423.2(1) and 423.5(1).

ITEM 62. Amend rule 701—231.10(423) as follows:

701—231.10(423) Exempt sales of prizes. 231.10(1) In general. The sales price from sales of tangible personal property, specified digital products, or services which will be given as prizes to players in games of skill, games of chance, raffles, and bingo games as defined in and lawful under Iowa Code chapter 99B is exempt from tax. See department of inspections and appeals’ 481—Chapters 100 through 106, Iowa Administrative Code, for a description of the games of skill, games of chance, raffles, and bingo games which are lawful. See rule 481—100.6(99B) for a description of the prizes which may be lawfully awarded. 231.10(2) Gift certificates. A gift certificate is not tangible personal property. If a person wins a gift certificate as a prize and then redeems the gift certificate for merchandise, tax is payable at the time the gift certificate is redeemed. Reference 701—15.16(422,423). This rule is intended to implement 2005 Iowa Code subsectionsection 423.3(62).

ITEM 63. Amend subrule 231.15(5) as follows: 231.15(5) Calculating taxable and exempt sales price—discounts, coupons, buying at a reduced price, and rebates. a. Discounts.A discount allowed by a retailer and taken on a taxable sale can be used to reduce the sales price of an item. If the discount reduces the sales price of an item to $99.99 or less, the item may qualify for the exemption. For example, a customer buys a $150 dress and a $100 blouse from a retailer offering a 10 percent discount. After applying the 10 percent discount, the final sales price of the dress is $135, and the blouse is $90. The dress is taxable (it is over $99.99), and the blouse is exempt (it is less than $99.99). Reference rule 701—15.6(422,423) for a definition of the word “discount” and a description of which retailers’ reductions in price are discounts which reduce the taxable sales price of items and which are not. b. Coupons.When a coupon is issued by a retailer and is actually used to reduce the sales price of any taxable item, the value of the coupon is excludable from the tax as a discount if the retailer is not reimbursed for the coupon amount by a third party. Therefore, a retailer’s coupon can be used to reduce the sales price of an item to $99.99 or less in order to qualify for the exemption. For example, if a customer purchases a pair of shoes priced at $110 with a coupon worth $20 off, the final sales price of the shoes is $90, and the shoes qualify for the exemption. A manufacturer’s coupon cannot be used to reduce the sales price of an item. Reference 701—subrule 15.6(3). c. Buy one, get one free or for a reduced price or “two for the price of one” sales.The total price of items advertised as “buy one, get one free,” or “buy one, get one for a reduced price,” or “two for the price of one” cannot be averaged in order for both items to qualify for the exemption. The following examples illustrate how such sales should be handled. d. Rebates.Rebates occur after the sale and do not affect the sales price of an item purchased. For example, a customer purchases a sweater for $110 and receives a $12 rebate from the manufacturer. The retailer must collect tax on the $110 sales price of the sweater. Reference 701—subrule 15.6(2)212.3(2) for additional information regarding rebates. e. Shipping and handling charges.Shipping charges separately stated and separately contracted for (reference rule 701—15.13(422,423) for explanation) are not part of the amount used to determine whether the sales price of an item qualifies it for exemption. Handling charges, however, are part of the amount used to make this determination if it is necessary to pay those charges in order to purchase an item.

ITEM 64. Amend subrule 231.16(4) as follows: 231.16(4) Qualifying and nonqualifying usage. a. Proration formula.Customers that have both qualifying and nonqualifying usage on the same meter or fuel tank are subject to a proration formula to obtain the qualifying portion eligible for the phase-out provisions. In these situations, the percentage of qualifying usage must be determined by the purchaser for the purposes of applying the phase-out tax. Nonqualifying usage would be subject to the full state tax rate. Consequently, a proration of the metered gas, electricity or fuel usage for the qualifying and the nonqualifying usage must be calculated by the purchaser. Reference 701—subrulessubrule 15.3(4) and 15.4(5) for guidance on proration of electricity, natural gas and fuels. In addition, the purchaser must furnish an exemption certificate to the supplier with respect to that percentage of metered gas or electricity that is eligible for the phase-out provisions. Reference 701—subrule 15.3(2). The customer may provide a calculation which includes only the usage not subject to phase-out. b. Percentage of usage.The customer must notify the utility provider of the percentage of qualifying and nonqualifying usage and the customer has the burden of proof regarding the percentage. The customer is liable for any mistakes or misrepresentations made regarding the computation or for failure to notify the utility provider in writing of the percentage of qualifying or nonqualifying usage. c. Security lights.Security lights used by customers that are billed as a flat rate tariff will be subject to the phase-out if the customer is classified as a residential customer. However, if a customer uses security lights which are billed as a flat rate tariff and that customer is classified as a commercial customer, the sales price including the usage of the security lights is not subject to the phase-out of state sales tax and is subject to the full state sales tax rate, unless another exemption from state sales tax is applicable. [Filed 9/1/21, effective 10/27/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5911CRevenue Department[701]Adopted and Filed

Rule making related to vehicles subject to registration

The Revenue Department hereby rescinds Chapter 34, “Vehicles Subject to Registration,” Iowa Administrative Code, and adopts a new Chapter 34 with the same title.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 421.14.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.Purpose and Summary In 2008, the Legislature moved the then-use tax imposed on vehicle registration to Iowa Code section 321.105A and renamed it the “fee for new registration.” The Iowa Department of Revenue (IDR) and the Iowa Department of Transportation (DOT) often field questions about confusing provisions from taxpayers seeking to register their vehicles as well as from county treasurers tasked with collecting the fee. IDR received input from DOT before submitting revisions to Iowa Code section 321.105A to the Legislature. The revisions were included in 2021 Iowa Acts, Senate File 366, which was enacted by the Legislature, was signed into law by Governor Reynolds, and became effective July 1, 2021. IDR’s existing rules on vehicle registration have not been updated since the 2008 legislation noted above and thus are out of date and in need of revision. IDR prepared this rule making in conjunction with the legislative changes enacted in 2021 Iowa Acts, Senate File 366. This new Chapter 34 is significantly updated from the existing chapter and includes many examples to provide guidance for taxpayers looking to register a vehicle and for country treasurers collecting the fee. Once these rules are in effect, all parties should discontinue the use of the UT-510 manual as guidance and refer to these rules instead.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on July 14, 2021, as ARC 5782C. IDR received comments on the Notice from the DOT, and IDR made changes in response to most of those suggestions. The changes made from the Notice are as follows:

The reference to “doc fees” in paragraph 34.2(1)“d” was adjusted to clarify that “doc fees” are not the only fees imposed by a dealer that are excluded from the purchase price of a vehicle.

Reference to the DOT was added to subrule 34.2(3) to allow the DOT to request additional documentation to establish a purchase price. Additionally, to allow for county treasurers and others impacted by the change time to adjust their processes, the requirement that a bill of sale be provided to establish the purchase price of a vehicle in subrule 34.2(3) will take effect January 1, 2022.

The term “relatives” in subrule 34.3(2) was changed to “family members” to be consistent with language in the Iowa Code.

Additional explanation was added to subrule 34.10(1) to note that the DOT’s title and registration application is an affidavit for purposes of the rule and related Iowa Code provision.

Subrule 34.10(4) mentioned acceptance of signature stamps on affidavits received by the DOT, but this reference has been removed as the DOT does not accept signature stamps.

Subrule 34.17(2) did not include reference to taxes or fees paid in other countries though the Iowa Code section the rule implements added that language, so it was added to the subrule.

Adoption of Rule Making This rule making was adopted by the Department on August 27, 2021.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. There was no fiscal note for 2021 Iowa Acts, Senate File 366.Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A).Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on October 27, 2021. The following rule-making action is adopted:

ITEM 1. Rescind 701—Chapter 34 and adopt the following new chapter in lieu thereof: CHAPTER 34VEHICLES SUBJECT TO REGISTRATION

701—34.1(321) Definitions. "Dealer" means the same as defined in Iowa Code section 321.1(17). "Directly and primarily used in recycling" means the same as defined in rule 701—230.19(423). "Optional service agreement" means an arrangement to prepay or pay for a predetermined price for future vehicle services, including but not limited to oil changes and tire rotation. "Regular course of business" means the activities that a person normally engages in as part of managing the person’s trade or business. If referring to a dealer licensed under Iowa Code section 322.7, “regular course of business” further includes only the make or makes of new vehicles listed on the dealer’s license. "Single-member LLC" means a limited liability company (LLC) of which income is reported on Schedule C of the owner’s personal income tax return. A single-member LLC shall be treated as a sole proprietorship. "Vehicle protection package" means services including but not limited to exterior paint protection; interior fabric, leather, and vinyl protection; rust proofing; and undercoating that are purchased at the time the vehicle is purchased. "Vehicle subject to registration" means any vehicle subject to registration pursuant to Iowa Code section 321.18. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.2(321) Purchase price. 34.2(1) “Purchase price” means the same as defined in Iowa Code section 321.105A(2)“a” and does not include: a. Cash discounts. b. Allowances for the trade-in of a vehicle subject to registration, as further outlined in rule 701—34.3(321). c. Gasoline, if separately itemized. d. Fees imposed by the dealer for document processing, including but not limited to those commonly known as “doc fees.” e. Any manufacturer’s cash rebate to a purchaser which is applied to the purchase price of a vehicle. f. Optional service agreements, if separately itemized. g. Vehicle protection plans, if separately itemized. h. Costs listed under Iowa Code section 423.1(51)“a.” 34.2(2) “Purchase price” shall, by way of example and not limitation, include, if valued in money, whether or not paid in money: a. Accessories. b. Additional equipment. c. Services. d. Freight and manufacturer’s tax, valued in money. e. In-kind compensation. f. Costs listed under Iowa Code section 423.1(51)“b.” 34.2(3) Beginning January 1, 2022, a bill of sale, or equivalent documentation, is required to establish purchase price. The bill of sale, or equivalent documentation, must be signed by the seller. The county treasurer, department of transportation, or department may require additional or alternative documentation as necessary to sufficiently establish purchase price. 34.2(4) In case of doubt related to the purchase price, the county treasurer or the department of transportation shall collect the fee. A claim for refund may be filed by the taxpayer if the taxpayer believes the fee has been erroneously collected. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.3(321) Trades. 34.3(1) Trades, generally. a. A trade-in allowance is excluded from the purchase price only if the requirements of Iowa Code section 321.105A(2)“a”(2)(c) are met. b. Unless otherwise excluded, a trade-in allowance is excluded from the purchase price only if the person(s) listed on the title of the traded vehicle are the same as the person(s) listed on the newly acquired vehicle. See Iowa Code section 321.105A(2). 34.3(2) Trades involving family members under Iowa Code section 321.105A(2)“a”(2)(c)(ii). This allowance is only for lineal relationships and does not extend to nonlineal family members. Consequently, this allowance is not extended to brothers, sisters, aunts, uncles, or cousins. 34.3(3) Trades involving an entity. a. When an entity is involved, the names on the title of the trade-in and newly acquired vehicle generally must be the same, except for sole proprietorships, which are not distinguished from the individual owner. b. A trade-in credit is not allowed when a corporate vehicle owner trades a vehicle subject to registration in on behalf of a stockholder to purchase a new vehicle in the stockholder’s name, or vice versa. 34.3(4) Trades involving a dealer. a. The dealer must be regularly engaged in the business of selling the type of vehicles involved in the trade. b. For purpose of the fee for new registration, the total trade-in amount will be deducted from the purchase price, even if the trade-in is used to pay off an outstanding loan balance. The amount the purchaser owes on the traded-in vehicle is not relevant in determining the purchase price of the new vehicle. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.4(321) Manufacturer’s rebate. 34.4(1) A manufacturer’s rebate can be used to reduce the purchase price of a vehicle subject to the fee for new registration. To qualify, all of the following must be present: a. A rebate must be a return of an amount that the purchaser would otherwise have paid; b. The rebate must be in the form of money; c. The rebate must be offered by a manufacturer licensed under Iowa Code section 322.27; d. The rebate must be applied to the purchase price of the vehicle; e. The rebate is strictly a transaction between a manufacturer and a purchaser. (1) The rebate must be from an entity acting as a manufacturer of such vehicle being purchased when offering the rebate. The rebate cannot be from a vehicle manufacturer engaging in other activities, such as a manufacturer acting in the capacity of a credit card issuer or a financing program; and (2) The purchaser must be in the process of purchasing the vehicle when the rebate is given. The rebate cannot be given to a customer in a situation similar to the credit card rebate program, in which the customer earns the right to the rebate over a period of time. Purchase of the vehicle must occur simultaneously with the receipt of the rebate, and the rebate cannot be allowed unless the customer purchases the vehicle. 34.4(2) Payment methods, such as credit or debit cards, issued by vehicle manufacturers that are used as a rebate toward the price of the manufacturer’s vehicle are not considered a manufacturer’s rebate for the purposes of the fee for new registration. These types of rebates cannot be used toward reducing the purchase price of a vehicle subject to the fee for new registration. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.5(321) Selling and purchasing the same vehicle. If a person sells a vehicle subject to registration and then buys the same vehicle back, the transaction is not exempt from the fee for new registration. These are two separate transactions, and both are subject to the fee for new registration. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.6(321) Federal excise tax. To be excluded from the fee for new registration, the federal excise tax must meet both of the following requirements: 34.6(1) It must be imposed upon the purchaser and be due at the time of the retail sale. 34.6(2) It must be billed or charged as a separate item. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.7(321) Sales to a Native American. If a dealer delivers a vehicle to a resident Native American on a reservation and, at a later time, the resident Native American registers the vehicle at the county treasurer’s office, the fee for new registration is not due since the delivery took place on a reservation. 34.7(1) If the vehicle is delivered off a reservation, the fee for new registration is due even if the sole use of the vehicle is on a reservation. 34.7(2) If delivery takes place on a reservation, but the owner is not a member of any federally recognized tribe, the fee for new registration is due. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.8(321) Sale of chassis with added equipment or accessories. 34.8(1) If a dealer sells a chassis and the purchaser has the dealer install any equipment, the fee for new registration is due on the full purchase price, including the chassis and the equipment. This is a completed vehicle when driven off the dealer’s lot. 34.8(2) If the chassis is purchased from a dealer and the equipment is installed by the purchaser from a third party, the fee for new registration is due on the chassis and sales tax is due on the equipment. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.9(321) Sale of a boat or ATV with a trailer. 34.9(1) If a boat or ATV dealer sells a boat or ATV with a trailer as a packaged deal, the dealer must itemize the boat or ATV, boat or ATV accessories, and trailer. The fee for new registration is due on the purchase price of the trailer. 34.9(2) If the boat or ATV dealer does not itemize, it is assumed the full price of the packaged deal is for the purchase of a trailer and not for the boat or ATV and accessories. The fee for new registration will be calculated based on the full price of the packaged deal. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.10(321) Administration. 34.10(1) Vehicle registrants may utilize either a paper or electronic affidavit as a method of submission. The title and registration application created under Iowa Code section 321.20 is an affidavit for purposes of this rule. 34.10(2) Exemptions shall be divided into eight categories as follows: a. UT01 - Iowa Code section 321.105A(2)“c”(19) and 321.105A(2)“c”(20). b. UT02 - Iowa Code section 321.105A(2)“c”(1). c. UT03 - Iowa Code section 321.105A(2)“c”(3) and 321.105A(2)“c”(12). d. UT04 - Iowa Code section 321.105A(2)“c”(14). e. UT05 - Iowa Code section 321.105A(2)“c”(6). f. UT06 - Iowa Code section 321.105A(2)“c”(2). g. UT07 - Iowa Code section 321.105A(2)“c”(5). h. UT08: (1) UT08b - Iowa Code section 321.105A(2)“c”(10). (2) UT08c - Iowa Code section 321.105A(2)“c”(8). (3) UT08d - Iowa Code section 321.105A(2)“c”(16). (4) UT08e - Iowa Code section 321.105A(2)“c”(7). (5) UT08i - Iowa Code section 321.105A(2)“c”(18). (6) UT08j - Iowa Code section 321.105A(2)“c”(13). (7) UT08k - Iowa Code section 321.105A(2)“c”(11). (8) UT08s - Iowa Code section 321.105A(2)“c”(17). (9) UT08 - Other - Iowa Code section 321.105A(2)“c”(4), 321.105A(2)“c”(9), 321.105A(2)“c”(15), and 321.105A(2)“c” (21) to 321.105A(2)“c”(31). 34.10(3) The burden of proof regarding whether an exemption applies is upon the person claiming the exemption. 34.10(4) Signatures are required on all affidavits. If a fleet (five or more vehicles) of vehicles is being registered, an affidavit for each vehicle within the fleet must be completed and signed. 34.10(5) Any claim for exemption from the fee for new registration made by a purchaser with a county treasurer is subject to review and ultimate determination by the department. If, after review, an exemption is found to have been claimed improperly, penalty and interest may apply in addition to the fee for new registration. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.11(321) Shell businesses. 34.11(1) The 90-day temporary period of operation under Iowa Code section 321.55(2) does not apply to a vehicle owned by a shell business. 34.11(2) Factors that indicate a business is a shell business include, but are not limited to, a lack of specific business activity or purpose and failure to maintain a physical location in the state in which the business is registered. 34.11(3) If the department determines that the nonresident owner of the vehicle is a shell business, it is presumed that: a. The Iowa resident in control of the vehicle is the actual owner of the vehicle; b. The vehicle is subject to Iowa registration; and c. The payment of the fee for new registration is owed by the Iowa resident. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.12(321) Purchased for resale. 34.12(1) A motor vehicle dealer licensed under Iowa Code chapter 322 may title or title and register a vehicle using an exemption under either Iowa Code section 321.105A(2)“c”(14) or 321.105A(2)“c”(15) if the vehicle is operated in a manner consistent with the lawful use of dealer plates under Iowa Code section 321.57 and any associated rules. 34.12(2) In order for a vehicle to be considered to be “held for resale,” all of the following criteria must be met during all times that the vehicle is registered to the dealer: a. The dealer must be licensed in Iowa pursuant to Iowa Code chapter 322; b. Any use of the vehicle by the dealer must not constitute a taxable sale; c. The dealer must keep the vehicle in its inventory for sale at all times; d. The person using the vehicle must be aware of and accept that the vehicle may be sold at any time, resulting in the removal of the vehicle from that person’s possession; e. The dealer must permit the vehicle to be used without charge; f. The dealer must not title the vehicle in its name and must operate the vehicle with dealer plates as provided in Iowa Code section 321.57. 34.12(3) If, at any time after the exemption is issued until the vehicle is no longer considered to be in the dealer’s inventory, the dealer fails to maintain any criteria defined in subrule 34.12(2), the fee for new registration is due on the purchase price paid by the dealer at the time of acquisition of the vehicle. 34.12(4) If a dealership license expires and is not renewed or the dealer license has been revoked, the dealer must title and register all the vehicles in the dealership inventory within 30 days of the license revocation or expiration. The fee for new registration is due on the purchase price paid by the dealer at the time of acquisition of each vehicle. However, if a dealer license is suspended, a dealer is not required to title or register the vehicles in the dealer’s inventory because a suspension is merely a temporary interruption in the dealership business. The dealer’s exemption remains intact during the period of suspension. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.13(321) Loans. Relief from a loan balance constitutes consideration for the purposes of the fee for new registration. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.14(321) Leased vehicles. 34.14(1) The fee for new registration on leased vehicles is a liability of the owner (lessor) of the vehicle and not the lessee. 34.14(2) Owners/lessors may require the lessee to reimburse the owner/lessor, by adding the fee for new registration to the monthly lease payment or by requiring the lessee to pay the fee for new registration up front. 34.14(3) When a lessee chooses to terminate a lease and purchase the vehicle being leased, the purchase is subject to a fee for new registration on the purchase price. There is no refund of the fee for new registration paid on the lease price. 34.14(4) If an existing lease is transferred to another lessee, no additional fee for new registration is due so long as the title to the vehicle is maintained by the same lessor and the terms of the lease are not changed. 34.14(5) When a vehicle with an existing lease established in another state is registered in Iowa, the lease price is calculated as established in Iowa Code section 321.105A(3)“b” and then shall be prorated for the number of months remaining on the lease. No credit is allowed for any fee or tax paid to another state. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.15(321) Vehicles purchased for the purpose of being leased and used exclusively for interstate commerce. 34.15(1) The department makes a distinction between a true lease and a contract to haul. While an agreement may be a lease for purposes of the Interstate Commerce Commission, this does not mean it is a lease for purposes of the fee for new registration. A true lease exists when the owner (lessor) gives the lessee exclusive possession of the lessor’s property for a specified period. A contract to haul exists when an owner contracts to do a piece of work while retaining control of the vehicle and methods of operation. A contract to haul is not a lease; therefore, the vehicle is not exempt. 34.15(2) An intrastate delivery occurs when property is picked up at one location in Iowa and delivered to another location in Iowa, regardless of whether the vehicle travels in another state in between pick-up and delivery. For example, picking up property in Des Moines and delivering it to Cedar Rapids is an intrastate delivery. Conversely, in an interstate delivery, either the pick-up or delivery site will be located outside of Iowa. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.16(321) Iowa Code chapter 326 vehicles. 34.16(1) The period for substantiating mileage by the department is fiscal year July 1 to June 30, with an exception if the initial registration period is a short year (less than 12 months). Mileage during that period will be totaled with the first full year for substantiation purposes. 34.16(2) Whether a vehicle is registered prorate or has county plates does not determine eligibility for exemption. 34.16(3) Records must be kept from the first four years of operation of the vehicle for at least ten years to prove the vehicle has consistently been eligible for the exemption. Summary records, such as the monthly or annual records required by the International Fuel Tax Agreement (IFTA), may be kept to prove the mileage requirement was met. Records are required for power units but not for trailers or semi-trailers. 34.16(4) The exempt status of a trailer or semi-trailer is based upon to what it is attached. If attached to an exempt power unit, the trailer or semi-trailer is also exempt. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.17(321) Vehicles purchased outside of Iowa. 34.17(1) Vehicles purchased with no intent for use in Iowa. a. Vehicles that are purchased by a nonresident for use in a location other than Iowa are not subject to the fee for new registration upon move-in to Iowa. The determination of intention of use in Iowa is a factual determination. The county treasurer should consider any appropriate factors including, but not limited to, the following: (1) Whether the vehicle was owned by the owner for a significant time prior to relocation to Iowa. A longer period of ownership while in another location may be indicative of intent of use in the other location. Conversely, if the vehicle was purchased near the time of relocation to Iowa, this might suggest intent of use in Iowa. (2) Whether the vehicle was registered in another location. (3) Whether a substantial number of miles were driven in the vehicle in another location since the owner purchased the vehicle. b. Vehicles purchased in countries other than the United States of America are not eligible for this exemption. 34.17(2) Vehicles purchased with intent of use in Iowa. Credit may be allowed for a fee for new registration paid to another state or country. For the credit to apply, the owner must show proof that the owner was legally required to, and did in fact, pay a fee for new registration, a sales/use tax, or an occupational tax to another state or country for the vehicle being registered in Iowa. Evidence of the payment may include, but is not limited to, purchase records, canceled checks, or invoices.Purchase Price..........................................$25,000Arizona State Sales Tax................................$500Arizona County Tax......................................$250Total Amount Due...................................$25,750Iowa Fee for New Registration................................$1,250Less Arizona State Sales Tax......................................$500Iowa Fee for New Registration Due............................$750Purchase Price..........................................$80,000California State Sales Tax..........................$7,200Total Amount Due....................................$87,200 This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.18(321) Business entity to business entity transfers with the same ownership and purpose. Transactions between two business entities may be exempted from the fee for new registration if certain criteria are met, as described in Iowa Code section 321.105A(2)“c”(3). This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.19(321) Homemade vehicles. 34.19(1) For the purposes of the vehicle fee for new registration, a homemade vehicle is one that has been constructed from any combination of new, used, or homemade parts that does not resemble a vehicle that was manufactured under a specific year, make, and model by a manufacturer and is not intended for resale. 34.19(2) Homemade vehicles include: a. A vehicle that has been structurally modified so that it does not have the same appearance as a similar vehicle from the same manufacturer. b. A vehicle that has been constructed entirely from homemade parts and materials not obtained from other vehicles; or c. A vehicle that has been constructed by using major component parts from one or more manufactured vehicles and cannot be identified as a specific make and model. This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366.

701—34.20(321,423) Glider kit vehicles. A glider kit vehicle is exempt from the fee for new registration upon sale or transfer by the person who purchased the parts and assembled the vehicle if sales or use tax was paid when the parts were purchased and the vehicle has never been registered previously. A glider kit vehicle would be subject to the fee for new registration, barring other applicable exemptions, if the glider kit vehicle is subsequently sold. Glider kit parts may be eligible for the resale exemption if the purchaser of the parts can satisfy the requirements of rule 701—225.4(423) to qualify for the exemption provided by Iowa Code section 423.3(2). This rule is intended to implement Iowa Code section 321.105A as amended by 2021 Iowa Acts, Senate File 366, and Iowa Code section 423.3. [Filed 8/27/21, effective 10/27/21][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.ARC 5917CRevenue Department[701]Adopted and Filed

Rule making related to discounted tobacco products

The Revenue Department hereby amends Chapter 83, “Tobacco Tax,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 453A.49.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 453A.42.Purpose and Summary The Department regularly audits or examines returns filed and tax remitted for the tax imposed on tobacco products under Iowa Code chapter 453A, subchapter II. The Department recently noticed an inconsistency in the application of the price on which tax due should be calculated. To provide clarity going forward, the Department adopted new subrule 83.3(3) so all taxpayers know how the Department will calculate tax due for sales of tobacco products. Iowa Code section 453A.42(18) defines “wholesale sales price” as “the established price for which a manufacturer sells a tobacco product to a distributor, exclusive of any discount or other reduction” (emphasis added). Thus, for a product sold by a manufacturer to a distributor at both a wholesale sales price and a lower price, often described as a “prepriced price” or “discounted price,” the tax should be calculated based on the wholesale sales price. This rule making establishes how the Department will determine whether products are identical and priced at a discount and provides several examples to help taxpayers understand how the subrule will be applied.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on July 28, 2021, as ARC 5788C. A public hearing was held virtually on August 17, 2021, at 2 p.m. Comments were received from five representatives of Core-Mark. The commenters indicated this rule making will create a variety of challenges for their operation. Because this rule making will resolve inconsistencies in how these products are taxed, the Department is unable to make changes that will continue current practice for Core-Mark and other similarly situated taxpayers. However, the Department has delayed the effective date of this change to January 1, 2022, to give such taxpayers more time to adjust to the rule. No written comments were received. No changes from the Notice have been made.Adoption of Rule Making This rule making was adopted by the Department on September 1, 2021.Fiscal Impact This rule making will result in an increase in tobacco tax revenue of approximately $325,000 in FY 2022 and about that much going forward. These revenues will be deposited in the Health Care Trust Fund.Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A).Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rule making will become effective on January 1, 2022. The following rule-making actions are adopted:

ITEM 1. Adopt the following new subrule 83.3(3): 83.3(3) Discounted tobacco products. a. A tobacco product sold by manufacturers to distributors that is discounted shall be taxed at the highest wholesale sales price for that product. A tobacco product is discounted when, compared to an identical product on the price list, it has a lower wholesale sales price. For purposes of this rule, tobacco products are identical if they consist of the same ingredients and are sold as the same package size on the price list, irrespective of the price printed on the box, the manufacturer’s suggested retail price provided to the retailer, the stock keeping unit or universal product code or similar codes used by the manufacturer, the type of packaging used, the name of the product as marketed, the geographic distribution, the target customer, or the length of the time of the promotion. b. When analyzing whether a tobacco product is discounted for purposes of this rule, the department will consider the manufacturer’s characterization of the tobacco product on the price list, but the manufacturer’s characterization of the tobacco product will not be controlling in the department’s determination. Examples of discounted tobacco products include, but are not limited to, prepriced cigars and reduced-price multipacks of tobacco products where the manufacturer sells an identical product on the price list at a higher wholesale sales price.

ITEM 2. Amend rule 701—83.3(453A), implementation sentence, as follows: This rule is intended to implement Iowa Code sectionsections 453A.42(18) and 453A.43. [Filed 9/1/21, effective 1/1/22][Published 9/22/21]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/22/21.

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