Iowa Legislature: Bulletin_9_26

Bulletin 09-26-2018

Front matter not included

ARC 4021CAdministrative Services Department[11]Notice of Intended Action

Proposing rule making related to processes and procedures and providing an opportunity for public comment

The Department of Administrative Services hereby proposes to amend Chapter 4, “Public Records and Fair Information Practices,” Chapter 6, “Agency Procedure for Rule Making,” Chapter 43, “Employee Payroll Deductions for Charitable Organizations,” Chapter 45, “Payroll Deduction for Tuition Program Contributions,” Chapter 46, “Payroll Deduction for Additional Insurance Coverage,” Chapter 60, “Separations, Disciplinary Actions and Reduction in Force,” Chapter 64, “Benefits,” Chapter 71, “Combined Charitable Campaign,” Chapter 103, “State Employee Driving Guidelines,” Chapter 110, “Inventory Guidelines for State of Iowa Personal and Real Property,” Chapter 117, “Procurement of Goods and Services of General Use,” Chapter 118, “Purchasing Standards for Service Contracts,” and Chapter 119, “Uniform Terms and Conditions for Service Contracts,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 8A.104, 8A.311, 17A.3 and 17A.4.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 8A.104 and 17A.7(2).Purpose and Summary These rules are being amended to correct outdated processes, procedures, and references. The proposed amendments address 13 of the Department’s chapters in the Iowa Administrative Code and are submitted as part of the Department’s five-year review of rules.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 The Department will not grant waivers under the provisions of these rules, other than as may be allowed under Chapter 9 of the Department’s rules concerning waivers.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 18, 2018. Comments should be directed to: Tami Wiencek Department of Administrative Services Hoover State Office Building 1305 East Walnut Street Des Moines, Iowa 50319-0114 Phone: 515.725.2017 Fax: 515.281.6140 Email: tami.wiencek@iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 18, 2018 10 to 11 a.m. Conference Room 5, A Level Hoover 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 Department and advise of specific needs. 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 4.13(2)"l" as follows: l. Confidential assignments of state vehicles by the state vehicle dispatcherfleet services. These records include letters/memos detailing driver assignments and plate numbers for selected vehicles pursuant to 2003 Iowa Code Supplement sectionsections8A.362, and Iowa Code section 321.19(1).

ITEM 2. Amend paragraph 4.14(6)"f" as follows: f. Telephone directory of state employees.The information technology enterpriseoffice of the chief information officer maintains a telephone directory of state employees. The directory contains names, department names, business addresses and telephone numbers. The publication also includes private industry information and advertising containing business names, addresses and telephone numbers. This record is stored on bothon paper and electronically.

ITEM 3. Amend rule 11—6.10(17A) as follows:

11—6.10(17A) Exemptions from public rule-making procedures. 6.10(1) Omission of notice and comment. To the extent the department for good cause finds that public notice and participation are unnecessary, impracticable, or contrary to the public interest in the process of adopting a particular rule, theThe department may adopt thata rule without publishing advance Notice of Intended Action in the Iowa Administrative Bulletin and without providing for written or oral public submissions prior to its adoptionpursuant to Iowa Code section 17A.4(3)“a” when the statute so provides or with the approval of the administrative rules committee. The department shall incorporate the required finding and a brief statement of its supporting reasons in each rule adopted in reliance upon this subrule. 6.10(2) Categories exempt. The following narrowly tailored categories of rules are exempted from the usual public notice and participation requirements because those requirements are unnecessary, impracticable, or contrary to the public interest with respect to each and every member of the defined class: rules mandated by either state or federal law. 6.(3) 6.10(2) Public proceedings on rules adopted without them. The department may, at any time, commence a standard rule-making proceeding for the adoption of a rule that is identical or similar to a rule it adopts in reliance upon subrule 6.10(1). Upon written petition by a governmental subdivision, the administrative rules review committee, an agency, the administrative rules coordinator, an association having not less than 25 members, or at least 25 persons, the department shall commence a standard rule-making proceeding for any rule specified in the petition that was adopted in reliance upon subrule 6.10(1). Such a petition must be filed within one year of the publication of the specified rule in the Iowa Administrative Bulletin as an adopted rule. The rule-making proceeding on that rule must be commenced within 60 days of the receipt of such a petition. After a standard rule-making proceeding commenced pursuant to this subrule, the department may either readopt the rule it adopted without benefit of all usual procedures on the basis of subrule 6.10(1), or may take any other lawful action, including the amendment or repeal of the rule in question, with whatever further proceedings are appropriate.

ITEM 4. Amend rule 11—6.17(17A) as follows:

11—6.17(17A) Review by department of rulesby department. Pursuant to Iowa Code section 17A.7(2) beginning July 1, 2012, over each five-year period of time, the department shall conduct an ongoing and comprehensive review of the department’s rules. 6.17(1) Any interested person, association, agency, or political subdivision may submit a written request to the administrative rules coordinator requesting the department to conduct a formal review of a specified rule. Upon approval of that request by the administrative rules coordinator, the department shall conduct a formal review of a specified rule to determine whether a new rule should be adopted instead or whether the rule should be amended or repealed. The department may refuse to conduct a review if it has conducted such a review of the specified rule within five years prior to the filing of the written request. 6.17(2) In conducting the formal review, the department shall prepare within a reasonable time a written report summarizing its findings, its supporting reasons, and any proposed course of action. The report must include a concise statement of the department’s findings regarding the rule’s effectiveness in achieving its objectives, including a summary of any available supporting data. The report shall also concisely describe significant written criticisms of the rule received during the previous five years, including a summary of any petitions for waiver of the rule received by the department or granted by the department. The report shall describe alternative solutions to resolve the criticisms of the rule, the reasons any were rejected, and any changes made in the rule in response to the criticisms as well as the reasons for the changes. A copy of the department’s report shall be sent to the administrative rules review committee and the administrative rules coordinator. The report must also be available for public inspection.

ITEM 5. Amend subrule 43.2(2) as follows: 43.2(2) Have 100 or more eligible state officers and employees participating for any payroll system except as follows:as set forth in rule 11—43.5(70A). a. In the case of employees at the University of Northern Iowa, 50 or more. b. In the case of employees at the Iowa School for the Deaf and the Iowa Braille and Sight Saving School, 25 or more participants.

ITEM 6. Amend rule 11—43.5(70A) as follows:

11—43.5(70A) Payroll system. A payroll system for the purpose of this chapter is any one of the following:

State of Iowa centralized.
Department of transportation.
Iowa State University of Science and Technology.
State University of Iowa.
University of Northern Iowa.
Iowa Braille and Sight Saving School.
Iowa School for the Deaf.
Iowa state fair board.
Community-based corrections.

Waterloo corrections district.

Ames corrections district.

Sioux City corrections district.

Council Bluffs corrections district.

Des Moines corrections district.

Cedar Rapids corrections district.

Davenport corrections district.

Fairfield corrections district.

ITEM 7. Amend rule 11—45.1(81GA,HF748), parenthetical implementation statute, as follows:

11—45.1(81GA,HF74870A) General provisions.

ITEM 8. Amend rule 11—45.2(81GA,HF748) as follows:

11—45.2(81GA,HF74870A) Definitions. For the purpose of this chapter, the following definitions apply. "Employee" means a permanentnontemporary employee of the state of Iowa. "Payroll system" means any one of the following:

State of Iowa centralized.
Department of transportation.
Iowa State University of Science and Technology.
State University of Iowa.
University of Northern Iowa.
Iowa Braille and Sight Saving School.
Iowa School for the Deaf.
Iowa state fair board.

"Qualified tuition program" means a program which meets the requirements of a qualified tuition program under Section 529 of the Internal Revenue Code.

ITEM 9. Amend rule 11—45.3(81GA,HF748), parenthetical implementation statute, as follows:

11—45.3(81GA,HF74870A) Tuition program qualifications.

ITEM 10. Amend rules 11—45.5(81GA,HF748) to 11—45.14(81GA,HF748), parenthetical implementation statutes, as follows:(81GA,HF74870A)

ITEM 11. Amend 11—Chapter 45, implementation sentence, as follows: These rules are intended to implement 2005 Iowa Acts, House File 748Iowa Code section 70A.17B.

ITEM 12. Amend rule 11—46.2(70A), definition of “Employee,” as follows: "Employee" means a permanentnontemporary state employee.

ITEM 13. Amend rule 11—60.1(8A) as follows:

11—60.1(8A) Separations. 60.1(1) Resignation, retirement, phased retirement, early retirement, or early termination. a. To resign or retire in good standing, an employee must give the appointing authority at least 14 calendar days’ prior notice unless the appointing authority agrees to a shorter period. A written notice of resignation or retirement shall be given by the employee to the appointing authority, with a copy forwarded to the director by the appointing authority at the same time. An employee who fails to give this prior notice may, at the request of the appointing authority, be barred from certification or appointment to that agency for a period of up to two years. Resignation or retirement shall not be subject to appeal under 11—Chapter 61 unless it is alleged that it was submitted under duress.Employees who are absent from duty for three consecutive workdays without proper authorization from the appointing authority may be considered to have voluntarily terminated employment. The appointing authority shall notify the employee of the authority’s decision to remove the employee from the payroll. Notification shall be sent to the employee’s last-known address, with delivery confirmation required. The appointing authority shall consider requests to review circumstances. b. Rescinded IAB 8/6/14, effective 9/10/14. c. Employees who received early retirement or early termination incentives provided by 1986 Iowa Acts, Senate File 2242, shall not be eligible for further state employment. d. c. Separation from employment for purposes of induction into military service shall be in accordance with 11—subrules 63.6(2) and 63.9(2). e. d. A person who has served as a commissioner or board member of a regulatory agency shall not be eligible for employment with that agency until two years after termination of the appointment. 60.1(2) Expiration of appointment. When an employee is separated upon the expiration of an appointment of limited duration, the appointing authority shall immediately report the separation to the department on forms prescribed by the director. 60.1(3) Early retirement incentive program—1992. This early retirement incentive program is provided for in 1992 Iowa Acts, chapter 1220. Employees who participated in this program are not eligible to accept any further employment with the state of Iowa. This prohibition does not apply to a program participant who is later elected to public office. 60.1(4) Sick leave and vacation incentive program—2002. This termination incentive program is provided for in 2001 Iowa Acts, Second Extraordinary Session, chapter 5. An employee who elected participation in this program is not eligible to accept any further permanent employment with the state of Iowa from the date of termination from employment. This prohibition does not apply to a program participant who is later elected to public office. 60.1(5) Sick leave and vacation incentive program—Fiscal Year 2003. This termination incentive program is provided for in 2002 Iowa Acts, Second Extraordinary Session, chapter 1001. An employee who elected participation in this program is not eligible to accept any further permanent part-time or full-time employment with the state of Iowa from the date of termination from employment. This prohibition does not apply to a program participant who is later elected to public office. 60.1(6) Sick leave and vacation incentive program—Fiscal Year 2005. This termination incentive program is provided for in 2004 Iowa Acts, chapter 1035. An employee who elected participation in this program is not eligible to accept any further permanent part-time or full-time employment with the state of Iowa from the date of termination from employment. This prohibition does not apply to a program participant who is later elected to public office. 60.1(7) State employee retirement incentive program—Fiscal Year 2010. a. This state employee retirement incentive program is provided for in 2010 Iowa Acts, Senate File 2062. b. To become a program participant, an employee must complete and file a program application form on or before April 15, 2010, and must terminate employment no later than June 24, 2010. c. For purposes of this program, the following definitions shall apply: "Employee" means an employee of the executive branch of this state, including an employee of a judicial district of the department of correctional services, an employee of the fair board, an employee of the state board of regents if the board elects to participate in the program, and an employee of the department of justice. However, “employee” does not mean an elected official. "Eligible employee" means an employee who is employed on February 10, 2010, who is 55 years of age or older on July 31, 2010, and who has submitted an application by the employee’s last day of employment to the Iowa public employees’ retirement system to begin monthly retirement benefits by July 2010. “Eligible employee” shall include an employee who began receiving IPERS monthly benefits prior to February 2010 if the employee is employed on February 10, 2010, and terminates employment on or before June 24, 2010. “Eligible employee” shall not include an employee who is eligible for the sick leave conversion program as described in Iowa Code section 70A.23, subsection 4, or a former employee who withdraws the application for monthly retirement benefits from the Iowa public employees’ retirement system before receiving the first month of benefits. "Participant" means an eligible employee who, on or before April 15, 2010, submits an application to participate and does participate in the state employee retirement incentive program established by this subrule. For the purposes of this program, a person remains a participant after all benefits under this program have been made. "Program" means the state employee retirement incentive program established in 2010 Iowa Acts, Senate File 2062. "State" means the state of Iowa and all of its branches, departments, agencies, boards, or commissions, including a judicial district department of correctional services and the state board of regents. d. A participant who elects to remain in the state’s retiree health insurance group plan may receive a health insurance contribution benefit. The health insurance contribution benefit consists of up to 5 years of contributions toward retiree health insurance. The contributions shall be used to pay the employer’s portion of the health insurance premiums. The department shall determine the contribution rate based on the employer’s contribution to an existing state plan.A participant shall begin receiving the health insurance contribution benefit once payments, if any, under Iowa Code section 70A.23 cease, and shall continue to receive such benefits for 5 years after termination of employment. If a participant is not eligible for payments under Iowa Code section 70A.23, the participant will begin receiving health insurance contribution benefits the month following termination of employment and shall continue to receive such benefits for 5 years after termination of employment. e. All existing rules and policies regarding continuation of health insurance and changing health insurance plans shall apply to participants and surviving spouses covered by the program. f. A participant will receive a years of service incentive payment for 5 years after termination of employment. The payments shall include the entire value of the participant’s accrued but unused vacation leave and, for participants with at least 10 years of state employment, $1000 for each year of state employment, up to 25 years of employment. State employment shall include all past and present employment with the state, regardless of whether the employee took a refund of the contributions made to IPERS for a prior period of service, if the employee provides adequate documentation of prior periods of employment. The payment shall be paid in five equal installments beginning in September 2010 and ending in 2014. g. If a participant dies within 5 years of termination of employment, the participant’s beneficiary will receive any remaining years of service incentive benefits. If the participant’s surviving spouse is covered on the participant’s state retiree health insurance plan, the surviving spouse may elect to continue health insurance coverage and will receive any remaining health insurance contribution benefits under this program. If the surviving spouse was not covered by the participant’s health insurance plan, or if there is no surviving spouse, any remaining health insurance contribution benefits are forfeited. h. A participating employee, as a condition of participation in this program, shall waive any and all rights to receive payment for accrued vacation pursuant to Iowa Code section 91A.4 and shall waive all rights to file suit against the state of Iowa, including all of its departments, agencies, and other subdivisions, based on state or federal claims arising out of the employment relationship. i. The administrative head, manager, supervisor, or any employee of a department, agency, board, or commission of the state of Iowa shall not coerce or otherwise influence any state employee to participate or not participate in this program. j. A participant is not eligible to accept any further employment with the state, other than as an elected official or a member of a board or commission, from the date of termination from employment. A participant may not enter into a contract to provide services to the state as an independent contractor or a consultant. k. The state’s obligations and duties under Iowa Code chapter 669 are not altered or diminished by a participant’s signing of the program application and release form. Participants may pursue any remedy allowed in Iowa Code chapter 669 without regard to program eligibility.

ITEM 14. Amend subrule 60.3(7) as follows: 60.3(7) Reduction in force shall not be used to avoid or circumvent the provisions or intent of 2003 Iowa Code Supplement section 8A.413, or these rules governing reclassification, disciplinary demotion, or discharge. Actions alleged to be in noncompliance with this rule may be appealed in accordance with 11—Chapter 61.

ITEM 15. Rescind and reserve subrule 64.10(5).

ITEM 16. Amend rule 11—71.1(8A) as follows:

11—71.1(8A) Policy. These rules define and structure the state’s charitable organization campaign program. The intent of the campaign is to provide an opportunity for state employees to contribute to eligible charitable agencies through the state’s payroll deduction process, to ensure accountability of participants with regard to the funds contributedfunds are contributed to an entity that complies with the definition of a charitable organization as defined in Iowa Code section 70A.14(1), and to minimize workplace disruption and administrative costs by allowing solicitation at the work site only once per year. Nothing about this program shall be construed as support or endorsement by the state of Iowa for any individual charitable agency or federation of agencies.

ITEM 17. Amend rule 11—103.2(8A) as follows:

11—103.2(8A) Definitions. "At-fault accident" means an accident in which the state driver is determined to be 50 percent or more responsible for the accident. "Cargo payload" means the net cargo weight transported. The weight of the driver, passengers, and fuel shall not be considered in determining cargo payload. "Cargo volume" means the space calculated in cubic feet behind the vehicle driver and passenger seating area. In station wagons, the cargo volume is measured to the front seating area with the second seat laid flat behind the driver. "Defensive driving course" means an eight-hour course with instruction provided by the Iowa state patrol. "Department" means the department of administrative services (DAS). "Driver improvement course" means an eight-hour course with instruction provided by a local area collegean Iowa community college. "Gross vehicle weight rating (GVWR)" means the weight specified by the manufacturer as the loaded weight of a single vehicle. "Habitual violation" means that the person has been convicted of three or more moving violations committed within a 12-month period. "Passengers" means the total number of vehicle occupants transported on a trip, including the driver. "Pool car" means a vehicle assigned to the state of Iowa, department of administrative services, division of fleet and mail poolfleet services. "Preventable accident," for purposes of this chapter, means an accident that could have been prevented or in which damage could have been minimized by proper evasive action. "Primary use" means the utilized application exceeds 50 percent of the miles driven annually for United States Environmental Protection Agency (EPA)-designated light-duty trucks and vans and exceeds 75 percent of the miles driven annually for EPA-designated passenger sedans and wagons. "Private vehicle" means any vehicle not registered to the state of Iowa. "Special work vehicle" means but is not limited to fire trucks, ambulances, motor homes, buses, medium- and heavy-duty trucks (25,999 lbs. GVWR and larger), heavy construction equipment, and other highway maintenance vehicles, and any other classes of vehicles of limited application approved by the state vehicle dispatcher. "State driver" means any person who drives a vehicle to conduct official state business other than a law enforcement officer employed by the department of public safety. "State vehicle" means any vehicle registered to the state of Iowa, department of administrative services.

ITEM 18. Amend subrule 103.3(1) as follows: 103.3(1) Agencies subject to vehicle assignment standards. Pursuant to Iowa Code Supplement section 8A.362, the agencies listed below shall assign all vehicles within their possession, control, or use in accordance with the standards set forth in rule 103.4(8A)11—103.4(8A). The following agencies are subject to the vehicle assignment standards in rule 103.4(8A)11—103.4(8A): a. State vehicle dispatcherThe department; b. State department of transportation; c. Institutions under the control of the state board of regents; d. The department for the blind; and e. Any other state agency exempted from obtaining vehicles for use through the state vehicle dispatcherfleet services.

ITEM 19. Amend subrule 103.4(1) as follows: 103.4(1) In order to maximize the average passenger miles per gallon of motor vehicle fuel consumed, vehicles shall be assigned on the following basis: a. EPA-rated compact sedans shall carry one or two passengers and their personal effects. b. EPA-rated compact wagons shall carry one or two passengers, their personal effects, and cargo for which a compact sedan cannot be used. c. b. EPA-rated midsize sedans shall carry three or more passengers and their personal effects. d. EPA-rated midsize wagons shall carry one or more passengers, their personal effects, and cargo that will not conform to the use of a midsize sedan. e. c. EPA-rated full-size sedans shall carry four or more passengers and their personal effects. f. d. Cargo vans shall be appropriate in size and GVWR for their primary use with regard to payload and cargo volume. g. e. Mini passenger vans shall carry three or more passengers, their personal effects, and cargo that does not conform to the use of a midsize wagon or full-size sedan. h. f. Eight-passenger vans shall carry five or more passengers and their personal effects. i. g. Twelve-passenger vans shall carry seven or more passengers and their personal effects. j. h. Fifteen-passenger vans shall carry nine or more passengers and their personal effects. k. i. Pickups and sport utility vehicles shall be appropriate in size, GVWR, and drivetrain (two-wheel drive or four-wheel drive) for their primary use with regard to trailering, payload, cargo volume, and on/off road requirements.

ITEM 20. Amend rule 11—103.5(8A) as follows:

11—103.5(8A) Type of accident. The determination as to whether an accident is without fault, at fault, or preventable shall be made by the risk manager of the department of administrative services. In making this determination, the risk manager will consider all relevant information including information provided by the state driver and others involved in the accident, information provided by witnesses to the accident and information contained in any investigating officer’s reports.

ITEM 21. Amend rule 11—103.7(8A) as follows:

11—103.7(8A) Required reporting. A state driver must report any potential liability, collision or comprehensive loss which occurs while conducting state business to the risk manager of the department of administrative services. The failure to report may result in payment of any loss from the funds of the state driver’s employing agency rather than from the state self-insurance fund. All documentation, such as proof of required class completion and insurance coverage, must be provided to the department risk manager.

ITEM 22. Amend rule 11—103.8(8A) as follows:

11—103.8(8A) Mandatory training. Each state driver who is assigned a state vehicle or who drives a state or private vehicle on state business at least 5,000 miles per year shall attend a defensive driving or driver improvement course every three years. Each state driver who drives a pool car shall also participate in vehicle safety classes as offered and required by the division of fleet and maildepartment and provided by the Iowa state patrol or Iowa community colleges.

ITEM 23. Amend rule 11—103.11(8A) as follows:

11—103.11(8A) Access to driving records. The fleet and mail divisiondepartment has the authority to monitor the Iowa department of transportation driving record of employees who drive a state vehicle or a private vehicle to conduct state business.

ITEM 24. Amend paragraph 103.12(3)"d" as follows: d. The state driver fails to notify the fleet and mail divisiondepartment of an operating while intoxicated conviction received while operating a state vehicle or a private vehicle.

ITEM 25. Amend rule 11—103.13(8A) as follows:

11—103.13(8A) Reconsideration of suspension. If a state driver is suspended from driving a state vehicle, the driver may request a reconsideration of the suspensionexcept as noted in 103.12(7). A written request for reconsideration must be submitted to the suspended driver’s immediate supervisor. The immediate supervisor must provide a written report, supporting or denying the employee’s request, to the director of the department of administrative services. The director shall act on this request and, within 60 days from receipt of the supervisor’s request for reconsideration, notify the state driver’s supervisor of the action taken.

ITEM 26. Amend subrule 110.2(1) as follows: 110.2(1) Personal property. For purposes of this chapter, personal property is any item or equipment that has an acquisition value of $5000 or more and has an anticipated useful life of one year or more. Computer software is to be excluded from this definition. If the minimum level for capitalization set by the federal Office of Management and Budget Circular A872 CFR Part 200 is changed, there will be a coordinated effort between the department of administrative services and the department of revenue towill determine if the amount should be adjusted for the state of Iowa.

ITEM 27. Amend subrule 110.2(3) as follows: 110.2(3) Acquisition value—cost or estimated cost. Cost or estimated cost may include freight, installation expense and administrative expense, if readily known and available. If cost is unknown and cannot be estimated, acquisition value is the fair market value. For donated items,historical treasures and similar assets, acquisition value is the fair market value at date of donationprice that would be paid to acquire an asset with similar service potential.

ITEM 28. Amend rule 11—110.6(7A) as follows:

11—110.6(7A) Inventory listing. Personal property should be accounted for on an inventory listing. As applicable, the following minimum information must be presented on the inventory listing for each record of personal property:

Department.
Tag number.
Description.
Acquisition value.
Location(s).
Acquisition date.
Disposition date (not applicable until disposal of property).
The only depreciation method allowed shall be the straight-line method.
If the department depreciates personal propertyis depreciated, the information must include the useful life of the asset.

Departments shall develop adequate internal control procedures that (1) identify individual(s) authorized to update and change the inventory records and (2) provide for an adequate segregation of duties between the recording and custody of property.

ITEM 29. Amend rule 11—117.2(8A), definition of “Department,” as follows: "Department" means the department of administrative services(DAS).

ITEM 30. Amend subrule 117.8(1) as follows: 117.8(1) General notification. a. Bid posting.The department and each state agency shall provide notice of solicitations. The department and each state agency shall post notice of every formal competitive bidding opportunity and proposal to the official Internet site, bidopportunities.iowa.gov, operated by the department of administrative services in accordance with Iowa Code sections 73.2, 8A.311, and 362.3. Instead of direct posting, the agency may add a link to bidopportunities.iowa.gov that connects to the website maintained by the agency on which requests for bids and proposals for that agency are posted. For the purposes of this subrule, a formal solicitation is as defined by the appropriate procurement authority. Informal competitive bidding opportunities and proposals may also be posted on or linked to the official state Internet site operated by the department of administrative services. b. Other forms of notice.Notice of competitive bidding opportunities and proposals may be provided by telephone or fax, in print, or by other means that give reasonable notice to vendors, in addition to the posting or linking of formal solicitations to the official Internet site operated by the department of administrative services. c. Posting of requests for architectural and engineering services.A request for proposals for architectural or engineering services may be posted electronically by a department or state agency in addition to other methods of advertisement required by law. d. Bids voided.A formal competitive bidding opportunity that is not preceded by a notice that satisfies the requirements of this subrule is void and shall be rebid. This requirement shall be effective for formal competitive bidding opportunities issued on or after September 1, 2005.

ITEM 31. Amend paragraph 117.10(2)"c" as follows: c. If reimbursable expenses are included in the price proposal, rates shall not exceed those in procedure 210.245, “Travel-in-state—board, commission, advisory council, and task force member expenses,” of the department of administrative servicesdepartment’s state accounting enterprise’s Accounting Policy and Procedures Manual.

ITEM 32. Adopt the following new definition of “Department” in rule 11—118.3(8A): "Department" means the department of administrative services (DAS).

ITEM 33. Amend subrule 118.15(2) as follows: 118.15(2) Nothing in this chapter is intended to supplant or supersede the requirements adopted by the department of administrative services relating to the processing of claims. State agencies entering into personal services contracts should refer to procedure 240.102, Miscellaneous—Services Contracting, of the department of administrative services,department’s state accounting enterprise policy and procedure manual.

ITEM 34. Amend subrule 118.16(1) as follows: 118.16(1) For the purpose of this chapter, a “waiver or variance” means an action by the director of the department of administrative services that suspends, in whole or in part, the requirements or provisions of a rule in this chapter as applied to a state agency when the state agency establishes good cause for a waiver or variance of the rule. For simplicity, the term “waiver” shall include both a “waiver” and a “variance.”

ITEM 35. Amend rule 11—119.5(8,8A) as follows:

11—119.5(8,8A) Special terms and conditions. Rule 11—119.4(8,8A) does not apply to service contracts containing special terms and conditions adopted by a department or establishment for use in its service contracts with the approval of the department of management, in cooperation with the office of the attorney general and the department of administrative services as provided for in 2003 Iowa Code Supplement section 8.47(2).ARC 4019CAdministrative Services Department[11]Notice of Intended Action

Proposing rule making related to hiring practices for Iowa national service corps or AmeriCorps participants and providing an opportunity for public comment

The Department of Administrative Services hereby proposes to amend Chapter 54, “Recruitment, Application and Examination,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 8A.104, 8A.413(4), 8A.413(7), 17A.3, and 17A.4.State or Federal Law Implemented This rule making implements, in whole or in part, 2018 Iowa Acts, House File 2420.Purpose and Summary 2018 Iowa Acts, House File 2420, establishes an Iowa National Service Corps Program administered by the Iowa Commission on Volunteer Service. Pursuant to 2018 Iowa Acts, House File 2420, state agencies or political subdivisions of the state may establish hiring preferences for any Iowa National Service Corps or AmeriCorps participant who has successfully completed a year of full-time service or 1,700 hours of service over a period extending beyond a year. The proposed amendment comports with 2018 Iowa Acts, House File 2420.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 The Department will not grant waivers under the provisions of these rules, other than as may be allowed under Chapter 9 of the Department’s rules concerning waivers.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 17, 2018. Comments should be directed to: Tami Wiencek Department of Administrative Services Hoover State Office Building 1305 East Walnut Street Des Moines, Iowa 50319-0114 Phone: 515.725.2017 Fax: 515.281.6140 Email: tami.wiencek@iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 17, 2018 3 to 4 p.m. Conference Room 5, A Level Hoover 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 Department and advise of specific needs. 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 subrule 54.5(3): 54.5(3) Preference for Iowa national service corps or AmeriCorps. State agencies may establish hiring preferences for an applicant who has participated in Iowa national service corps or AmeriCorps in accordance with 2018 Iowa Acts, House File 2420.ARC 4020CAdministrative Services Department[11]Notice of Intended Action

Proposing rule making related to continuation of benefits and providing an opportunity for public comment

The Department of Administrative Services hereby proposes to amend Chapter 64, “Benefits,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 8A.104, 17A.3 and 17A.4.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 8A.402(1)“c” and 2018 Iowa Acts, House File 2502.Purpose and Summary 2018 Iowa Acts, House File 2502, division XVII, creates a new section of Iowa Code, 509A.13C, addressing continuing coverage of health care benefits for the surviving spouse and each surviving child of an eligible peace officer or fire fighter killed in the line of duty. Pursuant to Iowa Code section 8A.402(1)“c,” the Department is the central agency responsible for state human resource management, including employee benefits. The new section in Iowa Code chapter 509A says, in part, if a governing body, a county board of supervisors, or a city council has procured accident or health care coverage for its employees under this chapter, such coverage shall permit continuation of existing coverage or reenrollment in previously existing coverage for the surviving spouse and each surviving child of an eligible peace officer or fire fighter killed in the line of duty. The proposed amendment comports with 2018 Iowa Acts, House File 2502.Fiscal Impact The fiscal impact cannot be determined. While there is an eligible population, there is no evidence of participation in the new offering. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers The Department will not grant waivers under the provisions of these rules, other than as may be allowed under Chapter 9 of the Department’s rules concerning waivers.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 16, 2018. Comments should be directed to: Tami Wiencek Department of Administrative Services Hoover State Office Building 1305 East Walnut Street Des Moines, Iowa 50319-0114 Phone: 515.725.2017 Fax: 515.281.6140 Email: tami.wiencek@iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 16, 2018 10 to 11 a.m. Conference Room 5, A Level Hoover 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 Department and advise of specific needs. 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 subrule 64.15(3): 64.15(3) The surviving spouse and each surviving child of an eligible peace officer or fire fighter, as defined in 2018 Iowa Acts, House File 2502, are eligible for the continuation of existing, or reenrollment in previously existing, health insurance coverage.ARC 4018CAdministrative Services Department[11]Notice of Intended Action

Proposing rule making related to procurement of state vehicles and providing an opportunity for public comment

The Department of Administrative Services hereby proposes to amend Chapter 117, “Procurement of Goods and Services of General Use,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 8A.104, 8A.311, 17A.3 and 17A.4.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 8A.311(20) and 2018 Iowa Acts, Senate File 2416.Purpose and Summary 2018 Iowa Acts, Senate File 2416, amends Iowa Code section 8A.311(20), eliminating life cycle costing as a determination in purchasing vehicles for the State of Iowa fleet. 2018 Iowa Acts, Senate File 2416, instead provides that the purchase of passenger vehicles; light, medium-duty, and heavy-duty trucks; passenger and cargo vans; and sport utility vehicles shall be awarded to the lowest responsive and responsible bidder based solely on bid price. The proposed amendments comport with 2018 Iowa Acts, Senate File 2416.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 The Department will not grant waivers under the provisions of these rules, other than as may be allowed under Chapter 9 of the Department’s rules concerning waivers. 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 17, 2018. Comments should be directed to: Tami Wiencek Department of Administrative Services Hoover State Office Building 1305 East Walnut Street Des Moines, Iowa 50319-0114 Phone: 515.725.2017 Fax: 515.281.6140 Email: tami.wiencek@iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 17, 2018 2 to 3 p.m. Conference Room 5, A Level Hoover 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 Department and advise of specific needs. 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 117.12(3) as follows: 117.12(3) Life cycle cost and energy efficiency. The department and agencies shall utilize life cycle cost and energy efficiency criteria in developing standards and specifications for procuring energy-consuming productsexcept for passenger vehicles; light, medium-duty, and heavy-duty trucks; passenger and cargo vans; and sport utility vehicles.

ITEM 2. Amend subrule 117.12(6) as follows: 117.12(6) Vehicle procurement. a. Specifications for procurement of all non-law enforcement, light-duty vehicles, excluding those purchased and used for off-road maintenance work or to pull loaded trailers, shall be for flexible fuel vehicles (as defined by Iowa Code section 8A.362(5)) when an equivalent flexible fuel model is available. b. Use of specifications for hybrid-electric or other alternative fuel vehicles (as defined by Iowa Code section 8A.362(5)) is encouraged. Procurement of hybrid-electric or other alternative fuel vehicles may be dependent upon whether the costscost of the vehicle’s life cycle arevehicle is equivalent to a non-alternative fuel vehicle or non-flexible fuel vehicle (a vehicle with a gasoline E10 engine) prior to the year 2010. c. The life cycle costs of American motor vehicles shall be reduced by 5 percent in order to determine if the motor vehicle is comparable to foreign-made motor vehicles. The life cycle costs of a motor vehicle shall be determined on the basis of the bid price, the resale value, and the operating costs based upon a useable life of five years or 75,000 miles, whichever occurs first. d. c. The average fuel efficiency for new passenger vehicles and light trucks, as defined in paragraph 117.12(6)“a,” that are purchased in a year shall equal or exceed the average fuel economy standard for the vehicles’ model years as published by the United States Secretary of Transportation.ARC 4004CAgriculture and Land Stewardship Department[21]Notice of Intended Action

Proposing rule making related to agricultural lime and providing an opportunity for public comment

The Agriculture and Land Stewardship Department hereby proposes to amend Chapter 43, “Fertilizers and Agricultural Lime,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 201A.5 and 201A.8.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 201A.5.Purpose and Summary The proposed amendments increase the cost of testing an individual sample of agricultural lime from $25 to $60. The testing fee has not been increased since 1988. The proposed amendments also reduce the number of samples that have to be taken and remove references to Iowa State University.Fiscal Impact Last year, 181 samples were tested. If the same number holds, an additional $6,335 in fees would be collected under the proposed amendments. 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. 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 16, 2018. Comments should be directed to: Margaret Thomson Iowa Department of Agriculture and Land Stewardship Wallace State Office Building 502 East 9th Street Des Moines, Iowa 50319 Fax: 515.281.6236 Email: margaret.thomson@Iowaagriculture.govPublic 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 43.20(2) as follows: 43.20(2) Sample fee. The manufacturer or producer of agricultural lime, limestone, or aglime shall pay a fee of no more than $25$60 per sample collected. This fee may be adjusted by the secretary of agriculture by a separate notice letter to each manufacturer or producer to reflect as accurately as possible the actual cost of sampling and testing expended by the Iowa department of agriculture and land stewardship and Iowa State University for each sample taken at the manufacturer’s or producer’s facilities.

ITEM 2. Amend rule 21—43.20(201), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 201.6201A.6 and 201.12201A.11.

ITEM 3. Amend subrules 43.32(1) and 43.32(4) as follows: 43 43.32 32(1) Samples of agricultural liming material for analyzing the number of pounds of ECCE shall be obtained by taking samples from the manufacturer’s production belt or stockpile. SamplesA minimum of one sample and up to five samples shall be taken at locations where there are permanent production facilities once each calendar month during the monthsyear that agricultural liming material is being produced. Samples shall be taken at locations where there are no permanent production facilities once during the first weektime that a portable plant is at the location producing agricultural liming material and once each week. Subsequent samples will be taken either during the period that the portable plant is at the locationor from the stockpile created, until a total ofthree to five representative samplesfrom the pile have been accumulated and submitted for analysis, after which a sample shall be obtained and tested once each calendar month during the months in which agricultural liming material is being produced. The manufacturer or producer of agricultural liming material shall notify the secretary of agriculture or person or persons appointed by the secretary of the production of agricultural liming material seven calendar days prior to the manufacture or production of agricultural liming material so that samples may be obtained by a person or persons appointed by the secretary in compliance with this rule. 43 43.32 32(4) Samples of water treatment plant lime for analyzing the number of pounds of ECCE shall be obtained by taking samples from the water plant designated sampling point. Samples shall be taken once each month during the months when agricultural liming material is being taken off-site for land application. The producer of the agricultural liming material shall notify the secretary of agriculture or person(s) appointed by the secretary about the intent to land apply the liming material seven calendar days prior to the land application ofwhen agricultural liming materialis stockpiled so that samples may be obtained in compliance with this rule.

ITEM 4. Amend rule 21—43.34(201A) as follows:

21—43.34(201A) Sample fee. The manufacturer or producer of agricultural liming material or specialty limestone shall pay a fee of no more than $25$60 per sample collected. This fee may be adjusted by the secretary of agriculture by a separate notice letter to each manufacturer or producer to reflect as accurately as possible the actual cost of sampling and testing expended by the Iowa department of agriculture and land stewardship and Iowa State University of Science and Technology for each sample collected.

ITEM 5. Amend subrule 43.35(1) as follows: 43.35(1) The secretary of agriculture shall, upon receipt of the analysis provided in rule 21—43.33(201A), certify the number of pounds of ECCE, using the method provided in rule 21—43.31(201A). The certification shall be forwarded to the manufacturer or producer from whom the sample was obtained by written notice and sent by United States mail.Each certification of ECCE shallshould be based on the average of a maximum of five analyses from five samples. Each new analysis received shallshould be added to the previous five analyses and the oldest analysis shall be omitted. Fewer than five analyses shall be averaged on the basis of the actual number of analyses. Nothing in this rule shall preclude a manufacturer or producer from having a certification on separate stockpiles of agricultural liming material provided that each stockpile shall be separated from any other stockpile and each separate stockpile has been sampled and certified as required.ARC 4005CDental Board[650]Notice of Intended Action

Proposing rule making related to dental licensure and providing an opportunity for public comment

The Dental Board hereby proposes to amend Chapter 11, “Licensure to Practice Dentistry or Dental Hygiene,” and Chapter 20, “Dental Assistants,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 147.76.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 147.2, 153.15A, 153.21, 153.33B and 153.39.Purpose and Summary The purpose of the proposed amendments is to clarify when the executive director can administratively issue a license, permit, or registration and to clarify the role of the license and registration committee in reviewing license, permit, and registration applications.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 The proposed amendments are not subject to waiver or variance pursuant to 650—Chapter 7.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 Board no later than 4:30 p.m. on October 26, 2018. Comments should be directed to: Steve Garrison Iowa Dental Board 400 S.W. Eighth Street, Suite D Des Moines, Iowa 50309 Phone: 515.281.3248 Fax: 515.281.7969 Email: steven.garrison@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 650—11.8(147,153) as follows:

650—11.8(147,153) Review of applications. Upon receipt of a completed application, the executive director as authorized by the board has discretion to:

Authorize the issuance of the license, permit, or registration.
Refer the license, permit, or registration application to the licenseand registration committee for review and consideration when the executive director determines that matters including, but not limited to, prior criminal history, chemical dependence, competency, physical or psychological illness, malpractice claims or settlements, or professional disciplinary history are relevant in determining the applicants’ qualifications for license, permit, or registration.

11.8(1) Following review and consideration of a license, permit, or registrationan application referred by the executive director, the licenseand registration committee may at its discretion: a. Recommend to the board issuance of the license, permit, or registration.Authorize the executive director to issue the license, permit, or registration. b. Recommend to the board denial of the license, permit, or registration.Send the license, permit, or registration application to the board for further review and consideration. c. Recommend to the board issuance of the license, permit, or registration under certain terms and conditions or with certain restrictions. d. Refer the license, permit, or registration application to the board for review and consideration without recommendation. 11.8(2) Following review and consideration of a license, permit, or registration application referred by the licenseand registration committee, the board shall: a. Authorize the issuance of the license, permit, or registration, b. Deny the issuance of the license, permit, or registration, or c. Authorize the issuance of the license, permit, or registration under certain terms and conditions or with certain restrictions. 11.8(3) The licenseand registration committee or board may require an applicant to appear for an interview before the committee or the full board as part of the application process. 11.8(4) The licenseand registration committee or board may defer final action on an application if there is an investigation or disciplinary action pending against an applicant, who may otherwise meet the requirements for license, permit, or registration, until such time as the committee or board is satisfied that licensure or registration of the applicant poses no risk to the health and safety of Iowans. 11.8(5) The dental hygiene committee shall be responsible for reviewing any applications submitted by a dental hygienist that require review in accordance with this rule. Following review by the dental hygiene committee, the committee shall make a recommendation to the board regarding issuance of the license or permit. The board’s review of the dental hygiene committee’s recommendation is subject to 650—Chapter 1. 11.8(6) An application for a license, permit, or reinstatement of a license will be considered complete prior to receipt of the criminal history background check on the applicant by the FBI for purposes of review and consideration by the executive director, the licenseand registration committee, or the board. However, an applicant is required to submit an additional completed fingerprint packet and fee within 30 days of a request by the board if an earlier fingerprint submission has been determined to be unacceptable by the DCI or FBI.

ITEM 2. Adopt the following new subrule 20.7(5): 20.7(5) Review of applications. The board shall follow the procedures specified in 650—11.8(147,153) in reviewing applications for registration and qualification.ARC 4031CHuman Services Department[441]Notice of Intended Action

Proposing rule making related to providers of behavioral health services to medical assistance recipients and providing an opportunity for public comment

The Human Services Department hereby proposes to amend Chapter 77, “Conditions of Participation for Providers of Medical and Remedial Care,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 249A.4; 249A.15 as amended by 2018 Iowa Acts, Senate File 2418; and 249A.15A as amended by 2018 Iowa Acts, Senate File 192.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 249A.4; 2018 Iowa Acts, Senate File 2418, sections 135 and 136; and 2018 Iowa Acts, Senate File 192, section 12.Purpose and Summary These proposed amendments reflect a recent statutory change entitling behavior analysts and assistant behavior analysts who are licensed pursuant to Iowa Code chapter 154D to payment for behavioral health services provided to recipients of medical assistance. These amendments also reflect recent statutory changes entitling provisionally licensed psychologists, temporarily licensed marital and family therapists and temporarily licensed mental health counselors who are licensed pursuant to Iowa Code section 154D.7 to payment for behavioral health services provided to recipients of medical assistance.Fiscal Impact These changes may allow Medicaid members additional access to behavioral health services; however, any fiscal impact is expected to be minimal. Medicaid currently allows behavioral analysts and assistant behavioral analysts to provide services, but the supervising authority must do the billing. These amendments will allow for these two professional types to bill Medicaid directly. Since the Medicaid program is already incurring these costs, minimal fiscal impact is expected. The amendments adding provisionally licensed psychologists, temporarily licensed marital and family therapists, and temporarily licensed mental health counselors as eligible providers under Medicaid is expected to have minimal fiscal impact since the change is consistent with current policy.Jobs Impact These amendments may incentivize additional behavior analysts and assistant behavior analysts to practice in Iowa and enroll with Medicaid to deliver behavioral health services to Medicaid members.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 441—1.8(17A,217).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 16, 2018. Comments should be directed to: Harry Rossander Bureau of Policy Coordination Department of Human Services Hoover State Office Building, Fifth Floor 1305 East Walnut Street Des Moines, Iowa 50319-0114 Email: policyanalysis@dhs.state.ia.usPublic 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 441—77.22(249A) as follows:

441—77.22(249A) Psychologists. 77.22(1) All psychologists licensed to practice in the state of Iowa and meeting the current credentialing requirements of the National Register of Health Service Psychologists are eligible to participate in the medical assistance program. Psychologists in other states are eligible to participate when they are duly licensed to practice in that state and meet the current credentialing requirements of the National Register of Health Service Psychologists. 77.22(2) A psychologist provisionally licensed to practice in the state of Iowa pursuant to Iowa Code section 154B.6 is eligible to participate in the medical assistance program when the person: a. Possesses a doctoral degree in psychology from an institution approved by the board of behavioral science; and b. Provides treatment under the supervision of a licensed psychologist pursuant to Iowa Code section 154B.6. Claims for payment for such services must be submitted by the licensed psychologist. 77.22(3) A psychologist provisionally licensed in another state is eligible to participate when the person: a. Possesses a doctoral degree in psychology from an institution approved by the board of behavioral science; and b. Provides treatment under the supervision of a licensed psychologist pursuant to Iowa Code section 154B.6. Claims for payment for such services must be submitted by the licensed psychologist who is duly licensed to practice in that state. This rule is intended to implement Iowa Code sections 249A.4 and 249A.15as amended by 2018 Iowa Acts, Senate File 2418.

ITEM 2. Amend rule 441—77.26(249A) as follows:

441—77.26(249A) Behavioral health services. The following persons are eligible to participate in the Medicaid program as providers of behavioral health services. 77.26(1) Licensed marital and family therapists (LMFT). Any person licensed by the board of behavioral science as a marital and family therapist pursuant to 645—Chapter 31 is eligible to participate. A marital and family therapist in another state is eligible to participate when duly licensed to practice in that state. 77.26(2) Temporarily licensed marital and family therapists. Any person who holds a temporary license to practice marital and family therapy pursuant to Iowa Code section 154D.7 is eligible to participate when the temporarily licensed marital and family therapist provides treatment under the supervision of a qualified marital and family therapist as determined by the board of behavioral science by rule. Claims for payment for such services must be submitted by the supervising licensed marital and family therapist. 77.(2) 77.26(3) Licensed independent social workers (LISW). Any person licensed by the board of social work as an independent social worker pursuant to 645—Chapter 280 is eligible to participate. An independent social worker in another state is eligible to participate when duly licensed to practice in that state. 77.(3) 77.26(4) Licensed master social workers (LMSW). a. A person licensed by the board of social work as a master social worker pursuant to 645—Chapter 280 is eligible to participate when the person: (1) Holds a master’s or doctoral degree as approved by the board of social work; and (2) Provides treatment under the supervision of an independent social worker licensed pursuant to 645—Chapter 280. b. A master social worker in another state is eligible to participate when the person: (1) Is duly licensed to practice in that state; and (2) Provides treatment under the supervision of an independent social worker duly licensed in that state. 77.(4) 77.26(5) Licensed mental health counselors (LMC). Any person licensed by the board of behavioral science as a mental health counselor pursuant to Iowa Code chapter 154D and 645—Chapter 31 is eligible to participate. A mental health counselor in another state is eligible to participate when duly licensed to practice in that state. 77.26(6) Temporarily licensed mental health counselors. Any person temporarily licensed by the board of behavioral science as a mental health counselor pursuant to Iowa Code section 154D.7 is eligible to participate when the temporarily licensed mental health counselor provides treatment under the supervision of a qualified mental health counselor as determined by the board of behavioral science by rule. Claims for payment for such services must be submitted by the supervising licensed mental health counselor. 77.(5) 77.26(7) Certified alcohol and drug counselors. Any person certified by the nongovernmental Iowa board of substance abuse certification as an alcohol and drug counselor is eligible to participate. 77.26(8) Licensed behavior analysts. Any person licensed by the board of behavioral science as a behavior analyst pursuant to Iowa Code chapter 154D is eligible to participate. A licensed behavior analyst in another state is eligible to participate when duly licensed to practice in that state. 77.26(9) Licensed assistant behavior analysts. A person licensed by the board of behavioral science as an assistant behavior analyst pursuant to Iowa Code chapter 154D is eligible to participate when the licensed assistant behavior analyst: a. Holds current certification as an assistant behavior analyst by a certifying entity; and b. Provides treatment under the supervision of a behavior analyst licensed pursuant to Iowa Code chapter 154D. Claims for payment for such services must be submitted by the supervising licensed behavior analyst. This rule is intended to implement Iowa Code chapter 249A as amended by 2011 Iowa Acts, Senate File 2332018 Iowa Acts, Senate Files 192 and 2418.ARC 4033CHuman Services Department[441]Notice of Intended Action

Proposing rule making related to subsidized adoptions and providing an opportunity for public comment

The Human Services Department hereby proposes to amend Chapter 201, “Subsidized Adoptions,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 234.6.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 234.6, Social Security Act Section 473(a)(4)(A) and (B), and 45 CFR 205.10.Purpose and Summary The administrative rules for subsidized adoptions are being revised to update outdated language, clarify eligibility criteria for special needs children, and clarify allowable expenses under special services and to add a provision to suspend adoption subsidy under defined circumstances. The proposed amendments promote consistency in the application of eligibility criteria through clarification of the rules. Federal policy has been updated to allow states to suspend adoption subsidy payments when concerns arise that the family is not financially supporting the family’s adoptive child. Suspension of adoption subsidy payments was not previously allowed by federal policy. Adoptive families would be affected by these amendments, potentially to their detriment. These amendments formalize the ability of the Department to assess and suspend a family’s use of adoption subsidy funds if concerns are brought forward that the adoptive child is not being supported. Payments would be suspended during the Department’s review and would be reinstated if the family is found to be supporting the family’s adoptive child or if the family agrees to provide documentation that the family is providing appropriate support and provides that documentation. These amendments would allow the Department to terminate the subsidy agreement if the family is not supporting the adoptive child and will not agree to provide and document support for the adoptive child.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 441—1.8(17A,217). 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 16, 2018. Comments should be directed to: Harry Rossander Bureau of Policy CoordinationDepartment of Human Services Hoover State Office Building, Fifth Floor1305 East Walnut StreetDes Moines, Iowa 50319-0114Email: policyanalysis@dhs.state.ia.usPublic 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 441—201.2(600), definitions of “Maintenance subsidy,” “Mental health professional,” “Mental retardation professional,” “Presubsidy,” and “Special services subsidy,” as follows: "Maintenance subsidy" means a monthly payment to assistthe family in meeting the living expenses and expenses related to the care of a special needs child in covering the cost of room, board, clothing, and spending money. The child will also be eligible for medical assistance pursuant to 441—Chapter 75. "MentalQualified mental health professional" means the same as defined in rule 441—24.1(225C).a person who meets all of the following conditions:

Holds a master’s degree in a mental health field including, but not limited to, psychology, counseling and guidance, or psychiatric nursing and social work; or is a doctor of medicine or osteopathic medicine; and
Holds a current Iowa license when required by the Iowa professional licensure laws for persons practicing as a psychiatrist, a psychologist, a marital and family therapist, a mental health counselor, an advanced registered nurse practitioner, a psychiatric nurse, or a social worker; and
Has at least two years of postdegree experience supervised by a mental health professional in assessing mental health problems, mental illness, and services needs and in providing mental health services.

"Mental retardationQualified intellectual disability professional" means a person who has at least one year of experience working directly with persons with mental retardationan intellectual disability or other developmental disabilities and who is one of the following:

A doctor of medicine or osteopathy.
A registered nurse.
A person who holds at least a bachelor’s degree in a human services field including, but not limited to:, social work, sociology, special education, rehabilitation counseling, andor psychology.

"Presubsidy" means payment for maintenance or special services for a special needs child who is placed in an adoptive homeand who meets all eligibility criteria for maintenance subsidy but whose adoption is not finalized. "Special services subsidy" means payment to a provider orreimbursement to the parent for medical, dental, therapeutic, or other services, equipment or appliances required by a child because of a handicapping conditionin order to meet the child’s identified special needs.

ITEM 2. Amend rule 441—201.3(600) as follows:

441—201.3(600) Conditions of eligibility or ineligibility. 201.3(1) The child is eligible for subsidy when the department or a private agency has documented that it has been unable to place the child in an appropriate adoptive home without a subsidy and the child is determined to be a child with “special needs” based on one or more of the following reasons: a. The child has a medically diagnosed disability, as determined by a physician, an advanced registered nurse practitioner or a physician assistant, which substantially limits one or more major life activities, requiresongoing professional treatment, assistance in self-care, or the purchase of special equipmentimpacts the child’s ability to perform daily living skills, and is expected to last 12 months or longer. b. The child has been determined by a qualified mental retardationintellectual disability professional to be mentally retardedintellectually disabled. c. Effective April 20, 2004, or later, theThe child has been determined by a qualified professional to be at high risk of developing a qualifying medical, mental, or emotional condition as defined in this subrule. A child in this group is eligible for subsidy of nonrecurring expenses only. d. The child has been diagnosed by a qualified mental health professional to have a psychiatric condition which impairs the child’s mental, intellectual, or social functioning, and for which the child requiresongoing professional services. e. The child has been diagnosed by a qualified mental health professional to have a behavioral or emotional disorder characterized by situationally inappropriate behavior which deviates substantially from behavior appropriate to the child’s age or significantly interferes with the child’s intellectual, social and personal adjustmentand which requires ongoing treatment. f. The child is aged eightfive or over and Caucasian. g. The child is aged two or older and is a member of a minority race or ethnic group or the child’s biological parents are of different races. h. g. The child is a member of a sibling group of three or morechildren who are placed in the same adoptive home. 201.3(2) A child who enters the United States from another country on the basis of a visa classifying the child as an orphan, in accordance with the Immigration and Naturalization Act, for the purpose of adoption by a specific United States family is not eligible for subsidized adoption maintenance payments, medical assistance, or special services except for nonrecurring expenses. A child entering the country for adoption may be eligible for subsidy for nonrecurring expenses, not to exceed $500, in the following situations: a. Rescinded IAB 8/11/99, effective 10/1/99. b. The child from another country who meets the criteria in subrule 201.3(1) and whose adoption is finalized after June 14, 1989, must file an application on Form 470-0744, Application for Adoption Subsidy, and complete Form 470-0749, Adoption Subsidy Agreement, before or at the time of a final decree of adoption. The claim for reimbursement must be filed on Form GAX, General Accounting Expenditure, within two years of the date of the adoption decree and must include receipts. c. If the adoptive placement disrupts prior to finalization or if the parental rights of the adoptive parents are terminated after the adoption is finalized and the department is named guardian of the child, the child may be eligible for subsidy in another adoptive placement. 201.3(3) Maintenance and childChild care subsidies for children who were determined to be eligible before January 1, 2004, shall continue unless one of the conditions for termination defined in 441—201.7(600) is presentif child care was written into the Adoption Subsidy Agreement and the need for child care continues. The child care subsidy payment shall not exceed the applicable reimbursement rate under the child care assistance program as specified in 441—subrule 170.4(7). 201.3(4) The determination of whether a child meets eligibility requirements is made by the Iowa department of human services. An adverse determination may be appealed according to rules in 441—Chapter 7. 201.3(5) The department shall review the subsidy agreement when the child reaches the age of 17½ to determine whether the child is eligible to receive a subsidy through theto the age of 21 due to the child’s physical, intellectual, or mentalhealth disability. a. The disability shall be diagnosed by a physician, a qualified mental health professional, or a qualified mental retardationintellectual disability professional. b. The diagnosis shall be current within one year ofprior to the child’s eighteenth birthday. c. Documentation of the child’s diagnosed disability shall be provided by the child’s parents to the department to make the determination of continued eligibility to the age of 21.

ITEM 3. Amend rule 441—201.4(600) as follows:

441—201.4(600) Application. Application for presubsidy or subsidyfor a special needs child in the guardianship of the department shall be made on Form 470-0744, Application for Subsidy, at the time of the adoptive placement of the child, or at any time in the adoptive process before finalization of the adoption. 201.4(1) The prospective adoptive family residing in Iowa who has been studied and approved for adoptive placement or a family residing outside of the state of Iowa studied and approved by a governmental child-placing agency or a licensed child-placing agency in that state, may apply for subsidy for an eligible Iowa child. 201.4(2) Withdrawal of the application for the subsidy shall be reported to the department immediately. 201.4(3) The effective date for the Adoption Subsidy Agreement will be the date the agreement is signed by all partiesthe adoptive parents and a representative of the department, which may be the date the child is placed in the adoptive home or any date up to and including the date the adoption is finalized. The agreement shall state the amount of the presubsidy or subsidy, and the frequency and duration of paymentsand the conditions under which the agreement may be terminated. 201.4(4) An application for subsidy cannot be taken after the child is adopted except when there are facts relevant to a child’s eligibility that were not presented before the finalizing of the adoption. a. Upon receiving verification that the child was eligible before the child’s adoption, the department may conduct an administrative review of the facts and may determine the child an eligible special needs child. Eligibility will be effective after Form 470-0744, Application for Subsidy, is completed and Form 470-0749, Adoption Subsidy Agreement, is signed by all parties. b. Requests for determining a child an eligible special needs child after the adoption is finalized shall be forwarded with verification of eligibility to the division of child and family services, adoption program. The division shall conduct an administrative review of eligibility factors and render a written decision regarding the child’s eligibility as a special needs child within 30 days of receipt of request and verification materials unless additional verification is requested. If additional verification is requested, a decision shall be reached within 30 days of receipt of additional verification materials. 201.4(5) A child in the guardianship of a licensed child-placing agency may be eligible for adoption subsidy when one of the following conditions is met: a. The child receives or is eligible to receive SSI based on a diagnosed disability, or b. The child received federally funded adoption subsidy in a prior adoption.

ITEM 4. Amend subrule 201.6(1) as follows: 201.6(1) Special services only. a. Reimbursement to the adoptive family or direct payment made to a provider is suspended from January 1, 2010, to June 30, 2010, for any special services negotiated in that period except for nonrecurring expenses as defined in subparagraph (7).Reimbursement to the family or direct payment to a provider may be made for the following special services needed to meet the needs of the child. (1) Outpatient counseling or therapy services. Reimbursement for outpatient individual or family services may be provided from a non-Medicaid provider only with approval from the service area manager or designee and when one of the following applies:

The services are not available from a Medicaid provider within a reasonable distance from the family.
The child and the family were already receiving therapy or counseling from a non-Medicaid provider and it would not be in the child’s best interest to disrupt the services.
Available Medicaid providers lack experience in working with foster, adoptive, or blended families.

Reimbursement to non-Medicaid providers shall be limited to the Medicaid rate. (2) Expenses for transportation, lodging, or per diem related to preplacement visits, not to exceed $2000 per family. (3) Medical services not covered by the Medicaid program shall be limited to an additional premium amount due to the child’s special needs to include the child in the family’s health insurance coverage groupwhen the child, either alone or with the family, resides outside the state of Iowa and that state’s Medicaid does not cover a needed service, or a provider enrolled with Iowa Medicaid cannot be secured. An adoption subsidy payment shall not supplement the Medicaid payment rate to a Medicaid provider or a non-Medicaid provider. (4) Child care, if the family has entered into a presubsidy or subsidy agreement on or before June 30, 2004, that contains a provision for child care reimbursement. Child care subsidy payments shall not exceed the maximum rates established in 441—paragraph 170.4(7)“a” for the child’s age and type of care, unless the department grants a waiver under rule 441—1.8(17A,217). Child care services are available through the child care assistance program to families that meet the requirements of 441—Chapter 170.An additional premium amount as a result of adding the child to the family’s health insurance group. (5) Medical transportation, food and lodging not covered by Medicaid and the family’s lodging and meals, if necessary, when the child is receiving specialized care or the child andin a facility 50 miles or farther from the family home, when the family are required to stay overnight as part of a treatment planis participating in services and to facilitate reunification with the child. (6) Supplies and equipment as required by the child’s special needs and unavailable through other resources. 1. Whenthe siblings in a sibling group of three or more are placed together, a one-time-only payment can be made, not to exceed $500 per child, to reimburse the family for expenses related to accommodating the needs of the sibling group. 2. When home modifications have been authorized to accommodate a child’s special needs and the family later sells the house, the family shall repay the department an amount equal to the increase in the equity value of the home attributable to the modifications. (7) Nonrecurring expenses. Payment for nonrecurring expenses is generally limited to a total of $500 per child for attorney fees, court costs and other related legal expenses. Nonrecurring expenses may be paid when the adoptive family has negotiated an Adoption Subsidy Agreement, Form 470-0747, or an Agreement to Future Adoption Subsidy, Form 470-0762. (8) Funeral benefits at the amount allowed for a foster child in accordance with 441—subrule 156.8(5). b. The need for special services shall be established by a report in the child’s record from the private or public agency which had guardianship of the child, and substantiating information from specialists as defined in rule 441—201.2(600)documented in the Adoption Subsidy Agreement.The family shall provide documentation of expenses to the department. c. Any single special service and any special service delivered over a 12-month period costing $500 or more shall have prior approval from the central office adoption program manager prior to expending program funds. d. For all Medicaid covered services the department shall reimburse at the same rate and duration as Medicaid as set forth in rule 441—79.1(249A).

ITEM 5. Amend subrule 201.7(8) as follows: 201.7(8) Rescinded IAB 3/12/08, effective 4/16/08.The child enlists in the military.

ITEM 6. Renumber rules 441—201.10(600) and 441—201.11(600) as 441—201.11(600) and 441—201.12(600).

ITEM 7. Adopt the following new rule 441—201.10(600):

441—201.10(600) Determination of ongoing subsidy eligibility and suspension of subsidy payments. 201.10(1) Eligibility for continuation of adoption subsidy shall be evaluated when the department has reasonable cause to suspect the adoptive parent is not providing financial support, or is no longer legally responsible for the child. This includes, but is not limited to, the following circumstances: a. The child is placed in out-of-home care. b. A person alleges the parents are not providing financial support to the child. c. A person other than the parent is awarded legal custody of the child. d. A person other than the parent is appointed as the guardian of the child. e. The child has applied for food assistance or other benefits. f. The child has not resided with the parent for the past 30 consecutive days. g. The parent is incarcerated. h. The parent is awaiting trial for criminal charges related to harm caused to a child in the home. 201.10(2) The department shall contact the child’s parents via letter, telephone, or electronic or other means and document such efforts. 201.10(3) The child’s parents shall provide documentation of support, including receipts, to the department upon request. 201.10(4) Upon completion of the department’s evaluation of the child’s continued eligibility for adoption subsidy, the department shall issue a written notice to the parents documenting required ongoing actions by the parents, including an expectation of continued cooperation by the parents to provide documentation of ongoing support to the child at the request of the department. 201.10(5) The department shall suspend adoption subsidy payments if the parents refuse to cooperate or if the department is unable to determine whether the parents are providing financial support or are legally responsible for the child. 201.10(6) Through a Notice of Decision, the department shall terminate the Adoption Subsidy Agreement upon a finding that the child is not being financially supported. 201.10(7) When the child has resided out of the parental home for 30 consecutive days, the department shall request a renegotiation of the Adoption Subsidy Agreement with the parents to reduce or suspend payments as agreed to by the parents. ARC 4032CHuman Services Department[441]Notice of Intended Action

Proposing rule making related to subsidized guardianship program and providing an opportunity for public comment

The Human Services Department hereby proposes to amend Chapter 204, “Subsidized Guardianship Program,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 234.6.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 234.6, 45 CFR 1356.21, and the Social Security Act, Sections 472 and 473(d)(3).Purpose and Summary The administrative rules for subsidized guardianship are being amended in order to implement the program under the guidelines of the federal Fostering Connections to Success and Increasing Adoptions Act. The previous program was administered through a federal waiver which has been eliminated.Fiscal Impact This rule making has a fiscal impact of $100,000 annually or $500,000 over five years to the State of Iowa. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers These amendments do not provide for waivers in specified situations because requests for the waiver of any rule may be submitted under the Department’s general rule on exceptions at 441—1.8(17A,217). 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 16, 2018. Comments should be directed to: Harry Rossander Bureau of Policy Coordination Department of Human Services Hoover State Office Building, Fifth Floor 1305 East Walnut Street Des Moines, Iowa 50319-0114 Email: policyanalysis@dhs.state.ia.usPublic 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 441—Chapter 204, Preamble, as follows: PreambleThis chapter implemented a five-year demonstration waiver project forimplements a subsidized guardianship program to provide financial assistance to guardians of eligible children who arein foster care but are not able to be adopted and who are not able to return home. Notification has been given to the United States Department of Health and Human Services that the demonstration project will end effective September 1, 2010. A subsidized guardianship agreement authorized under this chapter will remain in effect until the agreement is terminated under the terms of this chapter.

ITEM 2. Adopt the following new definition of “Relative” in rule 441—204.1(234): "Relative" means, for this chapter only, a person to whom a child is related by blood, marriage, or adoption, or a person who has a significant, committed, positive relationship with the child.

ITEM 3. Amend subrule 204.2(1) as follows: 204.2(1) General conditions of eligibility. The guardian named in a permanency order under Iowa Code section 232.104(2)“d”(1) or Iowa Code chapter 633 for a child who was previously in the custody of the department is eligible for subsidy when all of the following conditions exist: a. The child has a documented permanency goal of: (1) Long-term foster care; (2) (1) Guardianship; or (3) (2) Another planned permanent living arrangement. b. The child has been in a licensed foster care placement and has lived in foster care for at least 6 of the last 12 months. c. b. The child is either: (1) 14 years of age or older and consents to the guardianship; or (2) 12 years of age or older and guardianship has been determined to be in the child’s best interest; or (3) (2) UnderNo younger than 12 years of age and part of a sibling group with a child aged 1214 or older. d. c. The child has lived in continuous placementfoster family care with the prospective guardian for the six months before initiation of the guardianship subsidy. e. d. Theprospective guardian is a personlicensed relative foster parent who has a significant relationship with the child and demonstrates a willingness to make a long-term commitment to the child’s care. (1) The guardian mayshall be a relative or nonrelative,as defined in this chapter. (2) Placement with that guardian must be in the best interest of the child. The best-interest determination must be documented in the case file. e. A child 12 years of age or older and part of a sibling group with a child 14 years of age or older may be eligible for subsidy if all criteria are met. The following conditions for the younger sibling shall also be met: (1) The sibling is placed as a foster child in the same prospective guardian home. (2) The guardian and the department agree it is appropriate for guardianship to be granted for the sibling. f. The child has been randomly selected to participate in the waiver demonstration project.

ITEM 4. Amend subrule 204.2(4) as follows: 204.2(4) Other services. Rescinded IAB 10/11/06, effective 11/1/06.Other services available to meet the needs of the child that are free of charge, such as federal, state, and local governmental programs, or private assistance programs, shall be explored and used prior to the expenditure of subsidized guardianship funds.

ITEM 5. Amend rule 441—204.3(234) as follows:

441—204.3(234) Application. Applications for the subsidized guardianship program shall not be accepted after August 31, 2010may be made at any county office of the department. 204.3(1) Application forms. Application for a subsidized guardianship shall be made on the approved department form. 204.3(2) Eligibility determination. The determination of whether a child meets the eligibility requirements is made by the department. The proposed guardian shall be notified in writing of the decision of the department regarding the child’s eligibility for the program and the amount of subsidy to be provided. 204.3(3) Effective date. The effective date of the guardianship subsidy payment shall be the date the guardianship order is signed if all other conditions of eligibility are met. 204.3(4) Redetermination. The department worker shall review the child’s eligibility, the needs of the child and the child’s unearned income every 12 months. Reviews may be done more often if needed due to the child’s need for special services, revision of the subsidy amount because of the child’s age, or a request for review by the guardian. 204.3(5) Determination of eligibility after age 18. The department shall review the subsidy agreement when the child reaches the age of 17½ to determine whether the child is eligible to receive subsidy to the age of 21 due to the child’s physical, intellectual, or mental health disability. a. A disability shall be diagnosed by a physician, a qualified mental health professional or a qualified intellectual disability professional. b. The diagnosed disability shall be current within one year prior to the child’s eighteenth birthday. c. Documentation of the child’s diagnosed disability shall be provided by the child’s parents to the department to make the determination of continued eligibility to the age of 21.

ITEM 6. Amend rule 441—204.4(234) as follows:

441—204.4(234) Negotiation of amount of subsidy. 204.4(1) Subsidy agreement. The amount of subsidy shall be negotiated between the department and the guardian, and shall be based upon the needs of the child, and the circumstances of the family. Each time negotiations are completed, the Guardianship Subsidy Agreement, Form 470-3631, shall be completed and signed by the guardian and the department worker. 204.4(2) Amount of subsidy. The department shall enter into the agreement based upon available funds. Each time negotiations are completed, the department worker andthe guardian shall complete Form 470-3631,and sign a new Guardianship Subsidy Agreement. a. The guardianship subsidy shall be based on a flat daily foster care rate adjusted according to the needs of the child and the circumstances of the family.The maximum monthly maintenance payment for a child in subsidized guardianship shall be made pursuant to the foster family care maintenance rates according to the age and special needs of the child as found in 441—subrule 156.6(1) and 441—paragraphs 156.6(4)“b” and “f.” (1) The rate for the guardianship subsidy shall not exceed the state’s current daily basic foster care rate plus any daily level 1 or 2 special needs allowance or sibling allowance for which the child is eligible, as found atin 441—subrule 156.6(1) and 441—paragraphs 156.6(4)“b” and “f.” (2) Rescinded IAB 1/3/07, effective 1/1/07. b. If thesubsidized guardianship payment is less than the maximum amount allowed, the guardian may request an increase if thethere is a substantial change in the child’s or family’s needs and circumstances requirethat requires additional resources. c. Guardianship payments shall continue if the guardian dies or becomes incapacitated and has named a successor guardian in the Guardianship Subsidy Agreement or in any amendments to the agreement. 204.4(3) Placement outside of home. If a child needs to be placed out of the guardian’s home and the plan is for the child to return to the guardian within six months, a partial subsidy amount may be negotiated. 204.4(4) Nonrecurring expenses. The nonrecurring expenses necessary to finalize a guardianship shall be limited to the amount found in 441—subparagraph 201.6(1)“a”(7)not exceed $2,000. 204.4(5) Special services. a. Reimbursement to the guardian family or direct payment made to a provider is limited to the following services. (1) Outpatient individual or family services provided from a non-Medicaid provider only with approval from the service area manager or designee and when one of the following applies: 1. The services are not available for a Medicaid provider within a reasonable distance from the family. 2. The child and the family were receiving therapy or counseling from a non-Medicaid provider and it would not be in the child’s best interest to disrupt the services. 3. Available Medicaid providers experienced in working with foster, adopted, or blended families. (2) Travel-related expenses including transportation, meals and lodging not covered by Medicaid for visitation or family therapy when the child is receiving Medicaid-paid services out of the home. (3) Supplies and equipment as required by the child’s special needs and unavailable through other resources. (4) Funeral benefits at the amount allowed for a foster child in accordance with rule 441—156.8(234). b. Any single special service and any special service delivered over a 12-month period costing $500 or more shall have prior approval from the central office program manager prior to expending program funds. c. For all Medicaid-covered services, the department shall reimburse at the same rate and duration as Medicaid as set forth in rule 441—79.1(249A).

ITEM 7. Amend rule 441—204.6(234) as follows:

441—204.6(234) Termination of subsidy. A guardianship subsidy agreement negotiated based on an application signed on or before August 31, 2010, shall remain in effect until the subsidy is terminated based on one of the grounds listed in this rule. The subsidy shall terminate when any of the following occur, and a notice shall be sent which states the reason for the termination:

The child reaches the age of 18, unless the department determines that the subsidy may continue until the child reaches the age of 19 to facilitate the child’s completion of high school or a high school equivalency diploma.
The child marries or enlists in the military.
The child no longer lives with the guardian, except for placement outside the home as limited by subrule 204.4(3).
The relationship ends due to the death of the child or the death of the guardian of the child (one in a single-parent family or both in a two-parent family).
The terms of Form 470-3631,the Guardianship Subsidy Agreement, are concluded.
The guardian requests that the guardianship payment cease.
Due to incapacity, the guardian can no longer discharge the responsibilities necessary to protect and care for the child, and the guardianship has been or will be vacated.The department has determined the guardian is not providing financial support to the child.
The guardian fails to abide by the terms of Form 470-3631,the Guardianship Subsidy Agreement.
The guardianship case is terminated by court order.
The department funds for subsidized guardianship are no longer available.

ITEM 8. Amend rule 441—204.7(234) as follows:

441—204.7(234) Reinstatement of subsidy. Reinstatement of the subsidy shall be made when the subsidy was terminated because ofat the guardian’s request, and the guardian has requested reinstatement.ARC 4026CInspections and Appeals Department[481]Notice of Intended Action

Proposing rule making related to food and consumer safety and providing an opportunity for public comment

The Inspections and Appeals Department hereby proposes to amend Chapter 30, “Food and Consumer Safety,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 10A.104, 137C.6, 137D.2 and 137F.2.State or Federal Law Implemented This rule making implements, in whole or in part, 2018 Iowa Acts, Senate File 2390.Purpose and Summary The proposed amendments implement changes made to Iowa Code chapter 137F resulting from the enactment of 2018 Iowa Acts, Senate File 2390. The legislation amended definitions to be consistent with the current Food Code issued by the U.S. Food and Drug Administration (FDA) and modified fees and penalties. Prior to submission of this Notice, the Department distributed for comment a draft of these proposed amendments to industry associations, local contracting health departments and food safety educators. No comments were received. Fiscal Impact The Legislative Services Agency, Fiscal Services Division, estimated an increase in revenue to the General Fund of approximately $1.3 million annually due to the fee increases approved in Senate File 2390 (Fiscal Note, April 26, 2018). 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 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 16, 2018. Comments should be directed to: David Werning Iowa Department of Inspections and Appeals Lucas State Office Building 321 East 12th Street Des Moines, Iowa 50319-0083 Email: david.werning@dia.iowa.govPublic 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. Adopt the following new definitions of “Event,” “Time/temperature control for safety” and “Vending machine location” in rule 481—30.2(10A,137C,137D,137F): "Event" means a significant occurrence or happening sponsored by a civic, business, governmental, community, or veterans organization and may include an athletic contest. For example, an event does not include a single store’s grand opening or sale. "Time/temperature control for safety" means a food that requires time and temperature controls for safety to limit pathogenic microorganism growth or toxin formation. "Vending machine location" means the room, enclosure, space, or area where one or more vending machines are installed and operated, including the storage areas on the premises that are used to service and maintain the vending machine.

ITEM 2. Amend rule 481—30.2(10A,137C,137D,137F), definitions of “Farmers market potentially hazardous food license,” “Food establishment,” “Home bakery,” “Pushcart,” “Temporary food establishment” and “Vending machine,” as follows: "Farmers market potentially hazardoustime/temperature control for safety food license" means a license for a temporary food establishment that sells potentially hazardoustime/temperature control for safety foods at farmers markets. A separate annual farmers market potentially hazardoustime/temperature control for safety food license is required for each county in which the licensee sells potentially hazardoustime/temperature control for safety foods at farmers markets. The license is only applicable at farmers markets and is not required in order to sell wholesome, fresh shell eggs to consumer customers. "Food establishment" means an operation that stores, prepares, packages, serves, vends or otherwise provides food for human consumption and includes a food service operation in a salvage or distressed food operation, nutrition program operated pursuant to Title III-C of the Older Americans Act, school, summer camp, residential service substance abuse treatment facility, halfway house substance abuse treatment facility, correctional facility operated by the department of corrections,or the state training school and the Iowa juvenile home. Assisted living programs and adult day services are included in the definition of food establishment to the extent required by 481—subrules 69.28(6) and 70.28(6). “Food establishment” does not include the following:

A food processing plant.
An establishment that offers only prepackaged foods that are not potentially hazardoustime/temperature control for safety foods.
A produce stand or facility which sells only whole, uncut fresh fruits and vegetables.
Premises which are a home bakery pursuant to Iowa Code chapter 137D.
Premises which operate as a farmers marketif time/temperature control for safety foods are not sold or distributed from the premises.
Premises of a residence in which food that is not potentially hazardousa time/temperature control for safety food is sold for consumption off the premises to a consumer customer, if the food is labeled to identify the name and address of the person preparing the food and the common name of the food. This exception does not apply to resale goods. This exception applies only to sales made from the residence in person and does not include mail order or Internet sales.
A kitchen in a private home where food is prepared or stored for family consumption or in a bed and breakfast home.
A private home or private party where a personal chef or hired cook is providing food preparation services to a client and the client’s nonpaying guests.
A private home that receives catered or home-delivered food.
Child day care facilities and other food establishments located in hospitals or health care facilities that serve only patients and staff and are subject to inspection by other state agencies or divisions of the department.
Supply vehicles or vending machine locations.
Establishments that are exclusively engaged in the processing of meat and poultry and are licensed pursuant to Iowa Code section 189A.3.
The following premises, provided they are exclusively engaged in the sale of alcoholic beverages in a prepackaged form:
Premises covered by a current Class “A” beer permit, including a Class “A” native beer permit as provided in Iowa Code chapter 123;
Premises covered by a current Class “A” wine permit, including a Class “A” native wine permit as provided in Iowa Code chapter 123; and
Premises of a manufacturer of distilled spirits under Iowa Code chapter 123.
Premises or operations that are exclusively engaged in the processing of milk and milk products, are regulated by Iowa Code section 192.107, and have a milk or milk products permit issued by the department of agriculture and land stewardship.
Premises or operations that are exclusively engaged in the production of shell eggs, are regulated by Iowa Code section 196.3, and have an egg handler’s license.
The premises of a residence in which honey is stored; prepared; packaged, including by placement in a container; or labeled or from which honey is distributed.
Premises regularly used by a nonprofit organization which engages in the serving of food on the premises as long as the nonprofit organization does not exceed the following restrictions:
The nonprofit organization serves food no more than one day per calendar week and not on two or more consecutive days;
Twice per year, the nonprofit organization may serve food to the public for up to three consecutive days; and
The nonprofit organization may use the premises of another nonprofit organization not more than twice per year for one day to serve food.

"Home bakery" means a business on the premises of a residence that is operating as a home-based bakery where baked goods are prepared for consumption elsewhere. Annual gross sales of these products cannot exceed $35,000. “Home bakery” does not include:

A food establishment;
A food processing plant;
A residence where food is prepared to be used or sold by churches, fraternal societies, or charitable, civic or nonprofit organizations;
A residence that prepares or distributes honey;
A residence that distributes shell eggs;
A residence that prepares nonhazardous foodsthat are not time/temperature control for safety foods for sale at a farmers market; or
A residence that prepares nonhazardous baked goodsthat are not time/temperature control for safety foods sold directly from the residence. This exception does not apply to resale goods. This exception applies only to sales made from the residence in person and does not include mail order or Internet sales.

"Pushcart" means a non-self-propelled vehicle food establishment limited to serving nonpotentially hazardous foodsthat are not time/temperature control for safety foods or commissary-wrapped foods maintained at proper temperatures or precooked foods that require limited assembly, such as frankfurters. "Temporary food establishment" means a food establishment that operates for a period of no more than 14 consecutive days in conjunction with a single event or celebration. An “event or celebration” is a significant occurrence or happening sponsored by a civic, business, educational, government, community, or veterans’ organization and may include athletic contests. For example, an event does not include a single store’s grand opening or sale. "Vending machine" means a food establishment which is a self-service device thatwhich, upon insertion of a coin, paper currency, token, card or key,or by optional manual operation, dispenses unit servings of food in bulk or in packages without the necessity of replenishing the device between each vending operation. Vending machines that dispense only prepackaged, nonpotentially hazardous foodsthat are not time/temperature control for safety foods, panned candies, gumballs or nuts are exempt from licensing but may be inspected by the department upon receipt of a written complaint. “Panned candies” are those with a fine, hard coating on the outside and a soft candy filling on the inside. Panned candies are easily dispensed by a gumball-type machine.

ITEM 3. Amend subrule 30.3(1) as follows: 30.3(1) Transferability. A license is not transferable to a new owner or location. Any change in business ownership or business location requires a new license. Vending machines, mobile food units and pushcarts may be moved without obtaining a new license. A farmers market potentially hazardoustime/temperature control for safety food license may be used in the same county at different individual locations without obtaining a new license. However, if the different individual locations are operated simultaneously, a separate license is required for each location. Nutrition sites for the elderly licensed under Iowa Code chapter 137F may change locations in the same city without obtaining a new license.

ITEM 4. Amend subrule 30.3(3) as follows: 30.3(3) License expiration. A license is renewable and expires after one year, with the exception of a temporary food establishment license, which is event- and location-specific and isissued in conjunction with a single event at a specific location, which is valid for a period not to exceed 14 consecutive days.

ITEM 5. Amend rule 481—30.4(137C,137D,137F) as follows:

481—30.4(137C,137D,137F) License fees. The license fee is the same for an initial license and a renewal license. License applications are available from the Department of Inspections and Appeals, Food and Consumer Safety Bureau, Lucas State Office Building, Des Moines, Iowa 50319-0083, or from a contractor. License fees are set by the Iowa Code sections listed below and are charged as follows: 30.4(1) Retail food establishments. License fees for retail food establishments are based on annual gross sales of food or food products to consumer customers and intended for preparation or consumption off the premises (Iowa Code section 137F.6as amended by 2018 Iowa Acts, Senate File 2390) as follows: a. For annual gross sales of less than $10,000—$40.50$250,000—$150. b. For annual gross sales of $10,000 to $250,000—$101.25$250,000 to $750,000—$300. c. For annual gross sales of $250,000 to $500,000—$155.25. d. For annual gross sales of $500,000 to $750,000—$202.50. e. c. For annual gross sales ofmore than $750,000 or more—$303.75—$400. 30.4(2) Food service establishments. License fees for food service establishments are based on annual gross sales of food and drink for individual portion service intended for consumption on the premises (Iowa Code section 137F.6as amended by 2018 Iowa Acts, Senate File 2390) or subject to Iowa sales tax as provided in Iowa Code section 423.3 as follows: a. For annual gross sales of less than $50,000—$67.50$100,000—$150. b. For annual gross sales of $50,000 to $100,000—$114.50$100,000 to $500,000—$300. c. For annual gross sales of $100,000 to $250,000—$236.25. d. For annual gross sales of $250,000 to $500,000—$275.00. e. c. For annual gross sales ofmore than $500,000 or more—$303.75—$400. 30.4(3) Vending machines. License fees for food and beverage vending machines are $20$50 for the first machine and $5$10 for each additional machine (Iowa Code section 137F.6as amended by 2018 Iowa Acts, Senate File 2390). 30.4(4) Home bakery. The license fee for a home bakery is $33.75$50 (Iowa Code section 137D.2(1)as amended by 2018 Iowa Acts, Senate File 2390). 30.4(5) Hotels. License fees for hotels are based on the number of rooms provided to transient guests (Iowa Code section 137C.9) as follows: a. For 1 to 1530 guest rooms—$27.00$50. b. For 16 to 3031 to 100 guest rooms—$40.50$100. c. For 31 to 75101 or more guest rooms—$54.00$150. d. For 76 to 149 guest rooms—$57.50. e. For 150 or more guest rooms—$101.25. 30.4(6) Mobile food units or pushcarts. The license fee for a mobile food unit or a pushcart is $27$250 (Iowa Code section 137F.6as amended by 2018 Iowa Acts, Senate File 2390). 30.4(7) Temporary food service establishments. a. The fee for a temporary food service establishment license issued for up to 14 consecutive days in conjunction with a single event or celebration is $33.50$50 (Iowa Code section 137F.6as amended by 2018 Iowa Acts, Senate File 2390). b. The annual fee for a temporary food establishment license issued for multiple nonconcurrent events on a countywide basis during a calendar year is $200 (Iowa Code section 137F.6 as amended by 2018 Iowa Acts, Senate File 2390). Temporary food establishments that operate simultaneously at more than one location within a county are required to have a separate license for each location. 30.4(8) Food processing plants including food storage facilities (warehouses). For food processing plants, the annual license fee is based on the annual gross sales of food and food products handled at that plant or food storage facility (warehouse) (Iowa Code section 137F.6as amended by 2018 Iowa Acts, Senate File 2390) as follows: a. AnnualFor annual gross sales of less than $50,000—$67.50$200,000—$150. b. AnnualFor annual gross sales of $50,000 to $250,000—$135.00$200,000 to $2 million—$300. c. Annual gross sales of $250,000 to $500,000—$202.50. d. c. AnnualFor annual gross sales of $500,000 or more—$337.50more than $2 million—$500. 30.4(9) Farmers market. A person selling potentially hazardous time/temperature control for safety food at a farmers market must pay an annual license fee of $100$150 for each county of operation. Persons who operate simultaneously at more than one location within a county are required to have a separate license for each location. 30.4(10) DiscountCertificate of free sale or sanitation. If an establishment renews its license as a retail food establishment or food service establishment and has had a person in charge for the entire previous 12-month period who holds an active certified food protection manager certificate from a program approved by the Conference on Food Protection and the establishment has not been issued a critical violation during the previous 12-month period, the establishment’s license fee for the current renewal period shall be reduced by $50 but no more than the establishment’s total license fee(s)The fee for a certificate of free sale or sanitation is $35 for the first certificate and $10 for each additional identical certificate requested at the same time. 30.4(11) Unattended food establishment. The annual license fee for an unattended food establishment is based on the annual gross food and beverage sales (Iowa Code section 137F.6 as amended by 2018 Iowa Acts, Senate File 2390) as follows: a. Annual gross sales of less than $100,000—$75. b. Annual gross sales of $100,000 or more—$150. 30.4(12) Events. The license fee for an event is $50, which shall be submitted with a license application to the appropriate regulatory authority at least 60 days in advance of the event. An “event” for purposes of this subrule does not include a function with 10 or fewer temporary food establishments, a fair as defined in Iowa Code section 174.1, or a farmers market. 30.(11) 30.4(13) Voluntary inspection fee. The department shall charge a voluntary inspection fee of $100 when a premises that is not a food establishment requests a voluntary inspection. This rule is intended to implement Iowa Code sections 137C.9, 137D.2(1), and 137F.6and 2018 Iowa Acts, Senate File 2390.

ITEM 6. Rescind rule 481—30.7(137F) and adopt the following new rule in lieu thereof:

481—30.7(137F) Double licenses. A food establishment that holds both a food service establishment license and a retail food establishment license shall pay a license fee based on the annual gross sales for the dominant form of business plus $150.

ITEM 7. Amend rule 481—30.8(137C,137D,137F) as follows:

481—30.8(137C,137D,137F) Inspection frequency. 30.8(1) Food establishments. Food establishments shall be inspected based upon risk assessment and shall have routine inspections at least once every 2436 months and no more than once every 3 months. 30.8(2) Food processing plants. Food processing plants that process foods shall be inspected based upon risk assessment and shall have routine inspections at least once every 2460 months and no more than once every 6 months.If the United States Food and Drug Administration completes an inspection in a facility, the inspection shall count as a state inspection for frequency purposes. 30.8(3) Food processing plants that store foods. Food processing plants that store foods shall be inspected based upon risk assessment and shall be inspected at least once every 3684 months.If the United States Food and Drug Administration completes an inspection in a facility, the inspection shall count as a state inspection for frequency purposes. 30.8(4) Hotels. Hotels shall be inspected at least once biennially. 30.8(5) Home bakeries and vending machines. Home bakeries and vending machines shall be inspected at least once every 24 monthshave a pre-opening inspection and then shall not have a specific inspection frequency.An inspection may be triggered, for example, by complaints, potential foodborne illness, or information about potential violations of law or rules. 30.8(6) Farmers market potentially hazardoustime/temperature control for safety food. Farmers market potentially hazardoustime/temperature control for safety food licensees shall be inspected at least once annually. 30.8(7) Temporary food establishments. Temporary food establishments issued an annual license pursuant to paragraph 30.4(7)“b” shall be inspected at least once annually. This rule is intended to implement Iowa Code sections 137C.11, 137D.2, and 137F.10.ARC 4027CInspections and Appeals Department[481]Notice of Intended Action

Proposing rule making related to food establishment and food processing plant inspections and providing an opportunity for public comment

The Inspections and Appeals Department hereby proposes to amend Chapter 31, “Food Establishment and Food Processing Plant Inspections,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 10A.104 and 137F.2.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 10A.104 and 137F.2.Purpose and Summary The proposed amendments reflect 2018 Code of Federal Regulations updates and remove the expired transition compliance dates for section 2-102.12 of the 2013 FDA Model Food Code with supplement, which requires the employment of a certified food protection manager. Prior to filing this Notice, the Department distributed for comment a draft of these proposed amendments to industry associations, local contracting health departments and food safety educators. No comments were received.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 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 16, 2018. Comments should be directed to: David Werning Iowa Department of Inspections and Appeals Lucas State Office Building 321 East 12th Street Des Moines, Iowa 50319-0083 Email: david.werning@dia.iowa.govPublic 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 subparagraph 31.1(2)"a" as follows: (4) Food establishments at which food is not prepared, where customers may purchase only commercially prepared nonpotentially hazardousnon-time/temperature control for safety foods that are dispensed either unpackaged or packaged andthat are intended for off-premises consumption.

ITEM 2. Amend paragraph 31.1(2)"b" as follows: b. For all other establishments, the following time frames apply for employment of an individual who is a certified food protection manager: (1) For establishments newly licensed after January 1, 2014establishments, the requirement of section 2-102.12 must be met within six months of licensure. (2) Establishments in existence as of January 1, 2014, that do not receive a foodborne illness risk factor or public health intervention violation on or before July 1, 2017, shall meet the requirement of section 2-102.12 by January 1, 2018. (3) Establishments in existence as of January 1, 2014, that receive a foodborne illness risk factor or public health intervention violation on or before July 1, 2017, shall meet the requirement of section 2-102.12 within six months of the violation. (4) (2) If the individual meeting the requirement of section 2-102.12 leaves employment with an establishment required to meet section 2-102.12, the establishment shall meet the requirement of section 2-102.12 within six months.

ITEM 3. Amend subrule 31.1(4) as follows: 31.1(4) Morel mushrooms. Section 3-201.16, paragraph (A), is amended by adding the following:“A food establishment or farmers market potentially hazardoustime/temperature control for safety food licensee may serve or sell morel mushrooms if procured from an individual who has completed a morel mushroom identification expert course. Every morel mushroom shall be identified and found to be safe by a certified morel mushroom identification expert whose competence has been verified and approved by the department through the expert’s successful completion of a morel mushroom identification expert course provided by either an accredited college or university or a mycological society. The certified morel mushroom identification expert shall personally inspect each mushroom and determine it to be a morel mushroom. A morel mushroom identification expert course shall be at least three hours in length. To maintain status as a morel mushroom identification expert, the individual shall have successfully completed a morel mushroom identification expert course described above within the past three years. A person who wishes to offer a morel mushroom identification expert course must submit the course curriculum to the department for review and approval. Food establishments or farmers market potentially hazardoustime/temperature control for safety food licensees offering morel mushrooms shall maintain the following information for a period of 90 days from the date the morel mushrooms were obtained:“1. The name, address, and telephone number of the morel mushroom identification expert;“2. A copy of the morel mushroom identification expert’s certificate of successful completion of the course, containing the date of completion; and“3. The quantity of morel mushrooms purchased and the date(s) purchased.“Furthermore, a consumer advisory shall inform consumers by brochures, deli case or menu advisories, label statements, table tents, placards, or other effective written means that wild mushrooms should be thoroughly cooked and may cause allergic reactions or other effects.”

ITEM 4. Amend subrule 31.1(16) as follows: 31.1(16) Nonprofit exception for temporary events. Nonprofit organizations that are licensed as temporary food establishments may serve nonpotentially hazardousnon-time/temperature control for safety food from an unapproved source for the duration of the event.

ITEM 5. Amend subrule 31.2(1) as follows: 31.2(1) Definitions. For the purposes of this rule, the following definitions shall apply. The definitions of “food,” “label,” “labeling,” and “dietary supplement” are as defined in 21 U.S.C. Section 321 (2012).

ITEM 6. Amend subrule 31.2(2) as follows: 31.2(2) Prohibited acts. The prohibited acts identified in 21 U.S.C. Section 331(a) to (f), (k), and (v) (2012) shall also be prohibited acts in Iowa.

ITEM 7. Amend subrule 31.2(9), introductory paragraph, as follows: 31.2(9) Adoption of Code of Federal Regulations. The following parts of the Code of Federal Regulations (April 1, 20172018) are adopted:

ITEM 8. Amend paragraph 31.2(9)"v" as follows: v. 21 CFR Part 117, current good manufacturing practice and hazard analysis and risk-based preventive controls for human food, as followsshall apply, with the following exceptions: (1) As of October 1, 2017, subparts A, B and F of 21 CFR 117 shall be in effect for all food processing plants. (2) As of October 1, 2017, all other subparts of 21 CFR 117 shall be effective upon the effective date established by the federal government. (3) (1) As of October 1, 2018, qualifiedQualified facilities, as defined in 21 CFR 117, shall not include food processing plants manufacturing foods for interstate commerce orfor use as an ingredient to other foods. (2) Warehousing operations located on the premises of residences that store food for sale directly to a consumer customer or at a farmers market shall comply with subparts A, B, and F of 21 CFR 117.

ITEM 9. Amend subrule 31.2(10) as follows: 31.2(10) Egg products processing plants. The department shall generally use the good manufacturing practices adopted in paragraph 31.2(9)“b,” unless such practices are inconsistent with standards set by the United States Department of Agriculture, Food Safety and Inspection Service, in 9 CFR Parts 590-592, January 1, 20152018. If the standards are inconsistent, the standards adopted in 9 CFR Parts 590-592, January 1, 20152018, apply.

ITEM 10. Amend rule 481—31.5(137F), introductory paragraph, as follows:

481—31.5(137F) Temporary food establishments and farmers market potentially hazardoustime/temperature control for safety food licensees. While the retail food code adopted in rule 481—31.1(137F) applies to temporary food establishments, the following subrules provide a simplified version of requirements for temporary food establishments. If the two rules are inconsistent, the standards in this rule apply.

ITEM 11. Amend paragraph 31.5(1)"c" as follows: c. All employees, including volunteers, shall be under the direction of the person in charge. The person in charge shall ensure that the workers are effectively cleaning their hands, that potentially hazardoustime/temperature control for safety food is adequately cooked, held or cooled, and that all multiuse equipment or utensils are adequately washed, rinsed and sanitized.

ITEM 12. Amend paragraph 31.5(1)"d" as follows: d. Employees and volunteers shall not work at a temporary food establishment or farmers market potentially hazardoustime/temperature control for safety food establishment if the employees and volunteers have open cuts, sores or communicable diseases. The person in charge shall take appropriate action to ensure that employees and volunteers who have a disease or medical condition transmissible by food are excluded from the food operation.

ITEM 13. Amend paragraph 31.5(2)"b" as follows: b. Cold storage.Refrigeration units shall be provided to keep potentially hazardoustime/temperature control for safety foods at 41°F or below. The inspector may approve an effectively insulated, hard-sided container with sufficient coolant for storage of less hazardoustime/temperature control for safety food or the use of such a container at events of short duration if the container maintains the temperature at 41°F or below.

ITEM 14. Amend paragraph 31.5(2)"c" as follows: c. Hot storage.Hot food storage units shall be used to keep potentially hazardoustime/temperature control for safety food at 135°F or above. Electrical equipment is required for hot holding, unless the use of propane stoves and grills capable of holding the temperature at 135°F or above is approved by the department. Sterno cans are allowed for hot holding if adequate temperatures can be maintained. Steam tables or other hot holding devices are not allowed to heat foods and are to be used only for hot holding after foods have been adequately cooked.ARC 4041CInsurance Division[191]Notice of Intended Action

Proposing rule making related to fully insured multiple employer welfare arrangements and fully insured and self-insured association health plans and providing an opportunity for public comment

The Insurance Division hereby proposes to amend Chapter 77, “Multiple Employer Welfare Arrangements,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 505.8 and 507A.4; 2018 Iowa Acts, Senate File 2349; and U.S. Department of Labor, 83 FR 28912.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 507A; 2018 Iowa Acts, Senate File 2349; and U.S. Department of Labor, 83 FR 28912.Purpose and Summary The new rules proposed in this Notice of Intended Action serve two purposes, explained below; a third purpose of regulatory clarity is met by including in one chapter both the rules in this Notice together with the rules in ARC 4039C, IAB 9/26/18, on self-insured multiple employer welfare arrangements. The first purpose of the new rules is to comply with 2018 Iowa Acts, Senate File 2349, section 2, which requires the Insurance Commissioner to adopt rules to implement the legislation’s provisions. Senate File 2349 provides, among other things, that an entity that wants to act in Iowa as a multiple employer welfare arrangement (MEWA) must, in addition to meeting the other requirements of Iowa Code chapter 507A, meet certain “membership stability” requirements set forth by the Insurance Commissioner by rule. The new rules proposed in this Notice are intended to set forth such membership requirements for entities wishing to establish a fully insured MEWA, by ascertaining that there is a firm foundation for the stability of the underlying organization. Such stability is critical to ensure consumer protection. In addition, the Division has promulgated concurrently an Adopted and Filed Emergency After Notice rule making (ARC 4039C) which rescinds the current Chapter 77 and replaces it with a new Chapter 77 whose rules set forth such membership requirements for entities wishing to establish a self-insured MEWA. During the comment period for the Notice of Intended Action (ARC 3894C, IAB 7/18/18) in which new Chapter 77 was proposed, the Insurance Division received comments from stakeholders who asked about the extent of the application of those new rules to fully insured MEWAs. Accordingly, by making changes to the Noticed rules of ARC 3894C and incorporating those changes in the adopted rules in ARC 4039C, the Division clarified that those rules shall apply only to self-insured MEWAs. In that rule making, together with this rule making (in which the Division clarifies that some of these rules specifically apply only to fully insured MEWAs), the Division addresses the confusion and clarifies the requirements for both types of MEWAs. The second purpose intended by these proposed new rules is to address the U.S. Department of Labor’s rule 83 FR 28912 (DOL rule), issued on June 19, 2018, which establishes criteria for the creation and administration of association health plans (AHPs) and permits the establishment of AHPs in a staggered implementation timeline beginning September 1, 2018. The new DOL rule establishes some criteria under the Employee Retirement Income Security Act (ERISA) (Section 3(5)) that are in addition to criteria already there. The new criteria permit a determination whereby employers may join together in a group or association of employers and whereby, if the criteria are met, the group or association of employees will be permitted to be treated as if it were an employer sponsor of a single multiple employer “employee welfare benefit plan” and “group health plan,” as those terms are defined in Title I of ERISA. The DOL rule establishes a more flexible “commonality of interest” test for the employer members to support the establishment and maintenance of AHPs under ERISA. The DOL rule facilitates the adoption and administration of AHPs and expands access to affordable health coverage. In anticipation of this rule, the Iowa Legislature granted the Insurance Commissioner rule-making authority, including emergency rule-making authority, over such AHPs in 2018 Iowa Acts, Senate File 2349, sections 5 and 7. The rules proposed in this rule making provide a framework for the establishment of both fully insured and self-insured AHPs, as contemplated in the DOL rule. The rule makings of ARC 4039C and ARC 4040C were adopted emergency to be made effective September 12, 2018. If the Division determines through the rule-making process of this Notice that changes need to be made to the emergency-adopted rules of ARC 4040C, the Division intends that the rule-making process of this Notice shall incorporate those changes and shall be effective December 26, 2018.Fiscal Impact This rule making may have some fiscal impact to the State of Iowa, in that an increase in the number of these plans being sold would increase the amount of premium tax funds collected by the State from insurance companies providing coverage to fully insured MEWAs and fully insured AHPs. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers The Division’s general waiver provisions of 191—Chapter 4 apply to these rules. Public Comment Any interested person may make written suggestions or comments on these proposed amendments on or before 4:30 p.m. on October 30, 2018. Comments should be directed to: Ann Outka Insurance Division Two Ruan Center 601 Locust Street, Fourth Floor Des Moines, Iowa 50309 Fax: 515.281.3059 Email: ann.outka@iid.iowa.govPublic Hearing Also, there will be a public hearing, at which time persons may present their views either orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the rule making. October 30, 2018 11 a.m. to 12 noon Division Offices, Fourth Floor Two Ruan Center 601 Locust Street 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 Division and advise of specific needs. 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).Emergency Rule Making Adopted by Reference This proposed rule making is also published herein as an Adopted and Filed Emergency rule making (see ARC 4040C). The purpose of this Notice of Intended Action is to solicit public comment on that emergency rule making, whose subject matter is hereby adopted by reference.

ARC 4028CIowa Finance Authority[265]Notice of Intended Action

Proposing rule making related to military service member home ownership assistance program and providing an opportunity for public comment

The Iowa Finance Authority hereby proposes to amend Chapter 27, “Military Service Member Home Ownership Assistance Program,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 16.5.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 16.54 and 2018 Iowa Acts, House File 2480, section 2.Purpose and Summary This proposed rule making amends Chapter 27 by adding the definition of “manufactured home” and amending the definition of “qualified home” to exclude requirements that the manufactured home be attached to a permanent foundation and be taxed as real estate.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. 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 16, 2018. Comments should be directed to: Mark Thompson Iowa Finance Authority 2015 Grand Avenue Des Moines, Iowa 50312 Phone: 515.725.4937 Email: mark.thompson@iowa.govPublic 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. Adopt the following new definition of “Manufactured home” in rule 265—27.2(16): "Manufactured home" means the same as defined in Iowa Code section 435.1.

ITEM 2. Amend rule 265—27.2(16), definition of “Qualified home,” as follows: "Qualified home" means a home located in the state of Iowa that an eligible service member purchases, occupies, and uses as the service member’s primary residence. The home must fall into one of the following categories:

Single-family residence, including “stick-built” homes, modular homes, or manufactured homes, provided the home is attached to a permanent foundation and is taxed as real estate;
Condominium;
Townhome;
A property containing two to four residential units, where one unit is to be occupied by the eligible service member as the service member’s primary residence.

ARC 4008CManagement Department[541]Notice of Intended Action

Proposing rule making related to suspension and reinstatement of state funds and providing an opportunity for public comment

The Department of Management hereby proposes to adopt Chapter 13, “Suspension and Reinstatement of State Funds,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 8.6 and 2018 Iowa Acts, Senate File 481.State or Federal Law Implemented This rule making implements, in whole or in part, 2018 Iowa Acts, Senate File 481.Purpose and Summary The proposed rule making will establish procedures and guidelines to deny state funds to a local entity intentionally violating the provisions of 2018 Iowa Acts, Senate File 481, [Iowa Code chapter 27A] and to reinstate eligibility to receive state funds when a local entity comes into compliance with Senate File 481. These rules establish the process by which the Department of Management receives a final judicial determination that the local entity is out of compliance with Senate File 481 and is ineligible to receive state funds and state funds are denied. These rules also establish the process by which the Department of Management receives the declaratory judgment that the local entity is in full compliance with Senate File 481 and is eligible to receive state funds and state funds are reinstated.Fiscal Impact At this time it is not possible to estimate the total fiscal impact of 2018 Iowa Acts, Senate File 481, sections 9 and 10, and Chapter 13. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Waivers may be requested of the Department for any discretionary part of this rule making pursuant to Iowa Code chapter 17A.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 16, 2018. Comments should be directed to: Linda Leto Iowa Department of Management State Capitol, Room 13 1007 East Grand Avenue Des Moines, Iowa 50319 Phone: 515.281.3322 Email: linda.leto@iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 24, 2018 9 to 11 a.m. State Capitol, Room 116 1007 East Grand Avenue 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 Department and advise of specific needs. 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 541—Chapter 13: CHAPTER 13SUSPENSION AND REINSTATEMENT OF STATE FUNDS

541—13.1(87GA,SF481) Definitions. For purposes of this chapter: "City" means a municipal corporation but does not include a county, township, school district, or any special-purpose district or authority. "County" means an administrative subdivision in the state governed by a locally elected board of supervisors and may be comprised of subdivisions including cities, townships, school districts, or any special-purpose district or authority. "Declaratory judgment" means a judgment issued by a district court declaring a local entity is in full compliance with 2018 Iowa Acts, Senate File 481. "Department" means the Iowa department of management pursuant to Iowa Code chapter 8. "Final judicial determination" means a district court ruling on a civil action brought by the state attorney general’s office finding a local entity to have violated the provisions of 2018 Iowa Acts, Senate File 481. "Fiscal year" means the time period beginning on July 1 and ending the following June 30 as defined in Iowa Code section 8.36. "Governing body" means the mayor and city council of a city or the board of supervisors of a county. "Local entity" means the governing body of a city or county and includes an officer or employee of a local entity or a division, department, or other body that is part of a local entity, including but not limited to a sheriff, police department, city attorney, or county attorney. “Local entity” does include local city and county boards and commissions in which membership in the board or commission is the result of an appointment by the city council or the county board of supervisors. “Local entity” does not include local city and county boards and commissions whose membership is determined by election or is specifically set forth by the Iowa Code. “Local entity” does not include multijurisdictional boards and commissions in which a city or county is one of multiple local government members. "State agencies" means any boards, commissions, or departments, as defined by Iowa Code section 7E.4, or other administrative offices or units of the executive branch of the state. "State funds" means those funds held by the state that originate from revenues, fees or receipts collected by the state and distributed to local entities. Funds held by the state that are not defined as state funds include:

Federal funds (unless provided to the state and awarded as a grant by the state).
Funds paid out per gubernatorial or presidential emergency proclamation.
Any revenue collected and administered by the state on behalf of a local entity due to a locally imposed tax, fee or fine.
Any state funds for the provision of wearable body protective gear used for law enforcement purposes.
Payment for public protection, utilities, or goods and services.
Payment of settlements.
Setoffs as defined by Iowa Code section 8A.504.

541—13.2(87GA,SF481) Denial of state funds. State funds shall be denied to a local entity pursuant to 2018 Iowa Acts, Senate File 481, by all state agencies for each state fiscal year that begins after the date on which a final judicial determination that the local entity intentionally violated 2018 Iowa Acts, Senate File 481, is made in a civil action brought pursuant to 2018 Iowa Acts, Senate File 481, section 8. 13.2(1) The department will send written notification to all state agencies to deny state funds. Payments will continue to be made to the local entity until the beginning of the state fiscal year that begins after the date on which a final judicial determination is made, at which time payments will be denied. 13.2(2) If the local entity receives state funds through the county, the department will notify the county so that any needed changes may be made to apportionment systems for property tax credits, exemptions and replacements. 13.2(3) State agencies will contact federal granting agencies in writing to determine how to administer federal funds when state match funds are denied. State agencies may be required to discontinue drawing federal funds or issue repayments as instructed by federal granting agencies. 13.2(4) Funds will continue to be denied until the court issues a declaratory judgment declaring that the local entity is in full compliance with 2018 Iowa Acts, Senate File 481.

541—13.3(87GA,SF481) Reinstatement of eligibility to receive state funds. Upon issuance by the court of a declaratory judgment declaring that the local entity is in full compliance with 2018 Iowa Acts, Senate File 481, the local entity’s eligibility to receive state funds is reinstated. 13.3(1) The department will send written notification to all state agencies to reinstate state funds. Payments will be reinstated to the local entity beginning on the first day of the month following the date on which the declaratory judgment is issued. 13.3(2) If the local entity receives state funds through the county, the department will notify the county so that any needed changes may be made to apportionment systems for property tax credits, exemptions and replacements. 13.3(3) State agencies will contact federal partners in writing to determine how to reinstate the drawdown of federal funds when state match funds are reinstated. These rules are intended to implement 2018 Iowa Acts, Senate File 481.ARC 4030CPharmacy Board[657]Notice of Intended Action

Proposing rule making related to pharmacy technicians and electronic transfer of prescriptions and providing an opportunity for public comment

The Pharmacy Board hereby proposes to amend Chapter 3, “Pharmacy Technicians,” and Chapter 6, “General Pharmacy Practice,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 147.76, 155A.6A, 155A.33 and 155A.34.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 155A.6A and 155A.33 and 2018 Iowa Acts, Senate File 2322.Purpose and Summary The proposed amendments allow a certified pharmacy technician to transfer a prescription for a noncontrolled substance to another pharmacy or receive a prescription transfer for a noncontrolled substance from another pharmacy, allow a certified pharmacy technician to dispense a verified prescription which has been deemed to not require counseling to a patient while the pharmacist is on a break, and simplify rule language relating to the electronic transfer of prescriptions in anticipation of enhanced technologies in pharmacy software system capabilities. 2018 Iowa Acts, Senate File 2322, section 6, amended the Iowa Code during the 2018 Legislative Session to provide for the transfer of prescriptions between licensed pharmacies in accordance with Board rules. Electronic systems, technician training, and pharmacist oversight provide sufficient safeguards to ensure certified technicians are capable of transmitting such prescription information. Pharmacists often find it difficult to take a rest or lunch break due, in part, to technicians being prohibited from dispensing a prescription when the pharmacist is away from the immediate dispensing area. These proposed amendments would allow a certified pharmacy technician, at the discretion of the on-duty supervising pharmacist and pursuant to policies and procedures, to dispense a verified prescription which has been deemed to not require counseling to a patient when the pharmacist is absent from the pharmacy department on a break of limited duration.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. 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 Board no later than 4:30 p.m. on October 16, 2018. Comments should be directed to: Sue Mears Board of Pharmacy 400 S.W. 8th Street, Suite E Des Moines, Iowa 50309 Email: sue.mears@iowa.govPublic 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 657—3.21(155A) as follows:

657—3.21(155A) Delegation of functions. 3.21(1) Technical dispensing functions. A pharmacist may delegate technical dispensing functions to an appropriately trained and registered pharmacy technician, but only if the pharmacist is on site and available to supervise the pharmacy technician when delegated functions are performed, except as provided in 657—subrule 6.7(2)rule 657—6.7(124,155A) or 657—subrule 7.6(2)657—7.6(155A), as appropriate, or as provided for telepharmacy in 657—Chapter 9657—Chapter 13. Except as provided for an approved tech-check-tech program pursuant to 657—Chapter 40, the pharmacist shall provide and document the final verification for the accuracy, validity, completeness, and appropriateness of the patient’s prescription or medication order prior to the delivery of the medication to the patient or the patient’s representative. A pharmacy technician shall not delegate technical functions to a pharmacy support person. 3.21(2) Nontechnical functions. A pharmacist may delegate nontechnical functions to a pharmacy technician or a pharmacy support person only if the pharmacist is present to supervise the pharmacy technician or pharmacy support person when delegated nontechnical functions are performed, except as provided in 657—subrule 6.7(2)rule 657—6.7(124,155A) or 657—subrule 7.6(2)657—7.6(155A), as appropriate, or as provided for telepharmacy in 657—Chapter 9657—Chapter 13.

ITEM 2. Adopt the following new paragraphs 3.22(1)"k" and 3.22(1)"l": k. Transfer via oral, facsimile, or electronic means the original prescription drug order information and prescription refill information of a prescription for a noncontrolled substance to a pharmacy as requested by a patient or patient’s caregiver pursuant to rule 657—6.9(124,155A). A technician shall not transfer by any means the original prescription drug order information or prescription refill information for a controlled substance. l. Receive via oral, facsimile, or electronic means the transfer of original prescription drug order information and prescription refill information of a prescription for a noncontrolled substance from a pharmacy as requested by a patient or patient’s caregiver pursuant to rule 657—6.9(124,155A). A technician shall not receive via transfer by any means the original prescription drug order information or prescription refill information of a prescription for a controlled substance.

ITEM 3. Amend rule 657—3.23(155A) as follows:

657—3.23(155A) Tasks a pharmacy technician shall not perform. A pharmacy technician shall not be authorized to perform any of the following judgmental tasks:

Except for a certified pharmacy technician participating in an approved tech-check-tech program pursuant to 657—Chapter 40, provide the final verification for the accuracy, validity, completeness, or appropriateness of a filled prescription or medication order;
Conduct prospective drug use review or evaluate a patient’s medication record for purposes identified in rule 657—8.21(155A);
Provide patient counseling, consultation, or patient-specific drug information, tender an offer of patient counseling on behalf of a pharmacist, or accept a refusal of patient counseling from a patient or patient’s agent;
Make decisions that require a pharmacist’s professional judgment, such as interpreting prescription drug orders or applying information;
Transfer a prescription drug orderfor a controlled substance to another pharmacy or receive the transfer of a prescription drug orderfor a controlled substance from another pharmacy;
Delegate technical functions to a pharmacy support person.

ITEM 4. Amend subrule 6.7(1) as follows: 6.7(1) Department locked. The prescription department shall be locked by key or combination so as to prevent access when a pharmacist is not on site except as provided in subrulesubrules6.7(2)and6.7(4).

ITEM 5. Adopt the following new subrule 6.7(4): 6.7(4) Refill sales during pharmacist break. At the discretion of the on-duty supervising pharmacist and pursuant to established policies and procedures, the pharmacist may delegate to a technician the dispensing of previously verified prescriptions which have been identified to not require pharmacist counseling pursuant to rule 657—6.14(155A) when the pharmacist is on a break of limited duration and is absent from the pharmacy department.

ITEM 6. Amend rule 657—6.9(124,155A) as follows:

657—6.9(124,155A) Transfer of prescription. The transmission of a prescription drug order from a pharmacy to a pharmacy engaged in centralized prescription filling or processing on behalf of the originating pharmacy pursuant to the requirements of 657—Chapter 18 shall not constitute the transfer of a prescription. Upon the request of a patient or the patient’s caregiver, a pharmacy shall transfer original prescription drug order information and prescription refill information to a pharmacy designated by the patient or the patient’s caregiver, central fill or processing pharmacies excepted, subject to the following requirements: 6.9(1) Schedule III, IV, or V prescriptions. The transfer of original prescription drug order information for controlled substances listed in Schedule III, IV, or V is permissible between pharmacies on a one-time basis except as provided in subrule 6.9(8). 6.9(2) Noncontrolled substances prescriptions. The transfer of original prescription drug order information for noncontrolled prescription drugs between pharmacies is permissible as long as the number of transfers does not exceed the number of originally authorized refills and the original prescription is still valid. 6.9(3) CommunicationAuthorized individuals and means of transmission. The transfer is communicated directly between pharmacists, directly between pharmacist-interns under the direct supervision of pharmacists at the respective pharmacies, directly between a pharmacist and a pharmacist-intern under the direct supervision of a pharmacist, or as authorized in subrule 6.9(8). Following direct communication between authorized individuals as provided herein, theIndividuals authorized to engage in the transfer of prescriptions include a pharmacist, a pharmacist-intern under the direct supervision of a pharmacist, and a certified pharmacy technician only as authorized in rule 657—3.22(155A). The transferring pharmacist or pharmacist-internindividual may transmit the prescription and transfer information required under subrule 6.9(5) from the transferring pharmacy viaelectronic means pursuant to subrule 6.9(8) or, following direct communication between authorized individuals, via oral or facsimiletransmission. The receiving pharmacist or pharmacist-internindividual shall ensure the prescription transfer record maintained in the receiving pharmacy contains all of the information required under subrule 6.9(7). 6.9(4) Prescriptions maintained. Both the original and the transferred prescription drug orders are maintained for a period of two years from the date of last activity. 6.9(5) Record of transfer out. The pharmacist or pharmacist-internindividual transferring the prescription drug order information shall: a. Invalidate the prescription drug order; b. Record on or with the invalidated prescription drug order the following information: (1) The name, address, and, for a controlled substance, the DEA registration number of the pharmacy to which such prescription is transferred; (2) The name of the pharmacist or pharmacist-internindividual receiving the prescription drug order information; (3) The name of the pharmacist or pharmacist-internindividual transferring the prescription drug order information; and (4) The date of the transfer. 6.9(6) Original prescription status. The original prescription drug order shall be invalidated in the data processing system for purposes of filling or refilling, but shall be maintained in the data processing system for refill history purposes. 6.9(7) Record of transfer received. The pharmacist or pharmacist-internindividual receiving the transferred prescription drug order information shall: a. Indicate that the prescription drug order has been transferred; b. Record on or with the transferred prescription drug order the following information: (1) Original date of issuance and date of dispensing, if different from date of issuance; (2) Original prescription number; (3) Number of valid refills remaining, the date of last refill, and, for a controlled substance, the dates and locations of all previous refills; (4) Name, address, and, for a controlled substance, the DEA registration number of the pharmacy from which such prescription drug order information is transferred; (5) The date of the transfer; (6) Name of the pharmacist or pharmacist-internindividual receiving the prescription drug order information; (7) Name of the pharmacist or pharmacist-internindividual transferring the prescription drug order information; and (8) If transferring a controlled substance prescription from a pharmacy utilizing a shared electronic database system as described in subrule 6.9(8) to a pharmacy outside that shared system, the pharmacy name, location, DEA registration number, and prescription number from which the prescription was originally filled. 6.9(8) Electronic transfer between pharmacies. Pharmacies electronically accessing the same prescription drug order records via a real-time, online database may electronically transfer prescription information, including controlled substance prescription information, up to the maximum refills permitted by law and the prescriber’s authorization, if the following requirements are metin compliance with federal regulations for controlled substances. For transfers of prescriptions for noncontrolled substances and controlled substances, pharmacies that share a real-time, online database may transfer up to the maximum refills permitted by law and the prescriber’s authorization. A prescription for a controlled substance transferred between two pharmacies which do not share a real-time, online database may only be transferred one time. a. The data processing system shall have a mechanism to send the transferring pharmacy a message containing the following information: (1) The fact that the prescription drug order was transferred; (2) The unique identification number of the prescription drug order transferred; (3) The name, address, and DEA registration number of the pharmacy to which the prescription drug order was transferred and the name of the pharmacist or pharmacist-intern receiving the prescription information; and (4) The date and time of transfer. b. A pharmacist or pharmacist-intern under the direct supervision of a pharmacist in the transferring pharmacy shall review the message and document the review by signing and dating a hard copy of the message or logbook containing the information required on the message, or by a notation in the electronic message that includes the unique identification of the pharmacist or pharmacist-intern and the date of review, as soon as practical, but in no event more than 72 hours from the time of such transfer. c. For transfers of controlled substance prescriptions, all information requirements included in subrules 6.9(1) and 6.9(3) through 6.9(7) shall be satisfied in the electronic system. Transfers of controlled substance prescriptions shall also identify the pharmacy name, address, DEA registration number, and prescription number from which the prescription was originally filled.ARC 4029CPharmacy Board[657]Notice of Intended Action

Proposing rule making related to pharmacy operations and providing an opportunity for public comment

The Pharmacy Board hereby proposes to amend Chapter 5, “Pharmacy Support Persons,” Chapter 7, “Hospital Pharmacy Practice,” and Chapter 8, “Universal Practice Standards,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 124.301 and 147.76.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 124.301, 124.303, 124.306, 124.308, 126.10, 126.11, 155A.6A to 155A.7, 155A.13, 155A.15, 155A.27, 155A.28, 155A.31 to 155A.36, 155A.38, 155A.41, 155A.43 and 155A.44.Purpose and Summary Pursuant to Iowa Code section 17A.7(2), the Board has conducted an overall review of Chapters 5 and 7 of its administrative rules. The proposed amendments update requirements for references to be consistent with recent Board action for other practice settings, provide clarification where needed, reorganize where appropriate, remove the requirement that the hospital’s approved drug formulary be included in the pharmacy’s policies and procedures, add documentation requirements related to the pharmacy’s accountability of stock supplies of controlled substances previously required in Chapter 10, update language relating to outpatient automated dispensing systems to use a general term rather than a specific industry brand product, clarify that outpatient automated dispensing systems do not qualify for a unique pharmacy license, and update storage requirements for records to be consistent with recent Board action for other practice settings.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. 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 Board no later than 4:30 p.m. on October 16, 2018. Comments should be directed to: Sue Mears Board of Pharmacy 400 S.W. 8th Street, Suite E Des Moines, Iowa 50309 Email: sue.mears@iowa.govPublic 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 657—5.22(155A) as follows:

657—5.22(155A) Delegation of nontechnical functions. A pharmacist may delegate nontechnical functions to an appropriately trained and registered pharmacy support person, but only if the pharmacist is present to supervise the pharmacy support person when delegated functions are performed, except as provided in 657—subrule 6.7(2)rule 657—6.7(124,155A) or 657—subrule 7.6(2)657—7.6(155A), as appropriate.

ITEM 2. Amend rule 657—7.3(155A) as follows:

657—7.3(155A) Reference library. References may be printed or computer-accessed. Apharmacy shall maintain a reference libraryshall be maintained whichincludes, at a minimum, one current reference from each of the following categories, including access to current periodic updatesis either printed or computer-accessed and which adequately meets the needs of the services provided and patients served.Examples of such references include:

A reference including all pertinent Iowa laws, rules, and regulations that impact the pharmacy’s practice.
A patient information reference that includes or provides patient information in compliance with rule 657—6.14(155A).
A reference on drug interactions.
A generaldrug information reference.
A drug equivalency reference.
An injectable-drug compatibility reference.
A drug identification reference to enable identification of drugs brought into the facility by patients.
The readily accessible telephone number of a poison control center that serves the area.
Additional references as may be necessary for the pharmacist to adequately meet the needs of the patients servedrelating to specific patient populations served, such as pediatrics or geriatrics, or disease states treated, such as oncology or infectious disease. For example, the treatment of pediatric patients and oncology patients would require additional references unique to those specialties.

ITEM 3. Renumber rule 657—7.6(124,155A) as 657—7.5(124,155A).

ITEM 4. Amend renumbered rule 657—7.5(124,155A) as follows:

657—7.5(124,155A) Security. The pharmacy shall be located in an area or areas that facilitate the provision of services to patients and shall be integrated with the facility’s communication and transportation systems. The following conditions must be met to ensure appropriate control over drugs and chemicals in and under the control of the pharmacy: 7.5(1) Pharmacist responsibilityPharmacy department security. Each pharmacist, while on duty, shall be responsible forPolicies and procedures shall identify measures to ensure the security of the pharmacy areadepartment, including provisions for effective control against theft of, diversion of, or unauthorized access to drugs or devices, controlled substances, records for such drugs, and patient records as provided in 657—Chapter 21, including when the pharmacist is absent from the pharmacy department or absent from the facility pursuant to rule 657—7.6(155A). Policies and procedures shall identify the minimum amount of time that a pharmacist is available at the hospital pharmacy. 7.5(2) Access when pharmacist absent. When the pharmacist is absent from the facility, the pharmacy is closed and shall be secured from public access. Policies and procedures shall be established that identify who will have access to the pharmacy when the pharmacy is closed and the procedures to be followed for obtaining drugs, devices, and chemicals to fill an emergent need during the pharmacist’s absence. a. The pharmacist in charge may designate pharmacy technicians or pharmacy support persons who may be present in the pharmacy to perform technical or nontechnical functions, respectively, designated by the pharmacist in charge. Activities identified in paragraph “d” of this subrule may not be performed when the pharmacy is closed. b. If the pharmacist in charge has authorized the presence in the pharmacy of a pharmacy technician or a pharmacy support person to perform designated functions when the pharmacy is closed, only a certified pharmacy technician may assist another authorized, licensed health care professional to locate a drug or device pursuant to an emergent need. The pharmacy technician or the pharmacy support person may not dispense or deliver the drug, chemical, or device to the licensed health care professional. The licensed health care professional shall comply with established policies and procedures for obtaining drugs, devices, and chemicals when the pharmacy is closed. The licensed health care professional shall not ask or expect the pharmacy technician or the pharmacy support person to verify that the appropriate drug, chemical, or device has been obtained from the pharmacy. c. A pharmacy technician or a pharmacy support person who is present in the pharmacy when the pharmacy is closed shall prepare and maintain in the pharmacy a log identifying each period of time that the pharmacy technician or pharmacy support person worked in the pharmacy while the pharmacy was closed and identifying each activity performed during that time period. Each entry shall be dated and each daily record shall be signed by the pharmacy technician or pharmacy support person who prepared the record. The log shall be periodically reviewed by the pharmacist in charge. d. Activities which shall not be performed by a pharmacy technician or a pharmacy support person when the pharmacist is absent from the facility include: (1) Dispensing, delivering, or distributing any prescription drugs or devices to patients or others, including health care professionals, prior to pharmacist verification. Verification by a nurse or other licensed health care professional shall not supplant verification by a pharmacist. (2) Providing the final verification for the accuracy, validity, completeness, or appropriateness of a filled prescription or medication order. (3) Conducting prospective drug use review or evaluating a patient’s medication record for purposes identified in rule 657—8.21(155A). (4) Providing patient counseling, consultation, or drug information. (5) Making decisions that require a pharmacist’s professional judgment such as interpreting or applying information. (6) Preparing compounded drug products for immediate administration by other hospital staff or health care professionals without verification by a pharmacist. 7.5(3) Locked areas. All pharmacy areas where drugs or devices are maintained or stored and where a pharmacist is not continually present shall be locked. 7.5(4) Verification by pharmacist. When the pharmacy is open, patient-specific drugs or devices shall not be distributed prior to the pharmacist’s final verification and approval. 7.(5) 7.5(2) Drugs or devices in patient care areasSecurity outside the pharmacy department. Drugs or devices maintained or stored in patient care areas shall be in locked storage unless the patient care unit is staffed by health care personnel and the medication area is visible to staff at all times.Policies and procedures shall identify measures to ensure security in areas outside the pharmacy department where drugs, including controlled substances, devices, drug records, and patient records are maintained or stored, including provisions for effective control against theft of, diversion of, or unauthorized access to such drugs and records. 7.(6) 7.5(3) Authorized collection program. Receptacles that are located in the hospital for the authorized collection of controlled substances shall be secured pursuant to 657—Chapter 10 and federal regulations for disposal of controlled substances. Federal regulations regarding disposal of controlled substances can be found at http://deadiversion.usdoj.gov/drug_disposal/. 7.5(4) System security. Electronic systems shall be secured to prevent unauthorized access. System login or access credentials issued to an authorized system user shall not be shared with or disclosed to any other individual.

ITEM 5. Adopt the following new rule 657—7.6(155A):

657—7.6(155A) Pharmacist absence. 7.6(1) Pharmacist absent from the pharmacy department. A pharmacy’s policies and procedures shall identify how the pharmacy will operate and be secured to prevent unauthorized access during times when the pharmacist may be absent from the pharmacy department but not absent from the facility. The policies and procedures shall also identify authorized activities of pharmacy staff in the pharmacy department during the absence of the pharmacist from the department in compliance with rules of the board. a. Remote pharmacy services.Pursuant to rule 657—7.7(155A), the pharmacy may utilize the services of a remote pharmacist or pharmacy to provide pharmacist services to assist the pharmacy department while the onsite pharmacist is absent from the pharmacy department, such as when participating in clinical activities with facility staff and patients. b. Certified pharmacy technicians.Pursuant to the pharmacy’s policies and procedures, a certified pharmacy technician may be granted access to the pharmacy department to perform authorized technical functions. In the absence of a pharmacist, a certified pharmacy technician may only dispense, deliver, or distribute a drug, including a compounded preparation and controlled substance, when the drug is verified by a pharmacist, including by a remote pharmacist, except as authorized in an approved tech-check-tech program. A certified pharmacy technician may assist a licensed health care professional in locating a drug to meet the emergent needs of a patient but shall not provide final verification of the accuracy of the drug product obtained. c. Pharmacy support persons.Pursuant to the pharmacy’s policies and procedures, a pharmacy support person may be granted access to the pharmacy department to perform authorized nontechnical functions. d. Licensed health care professionals.Pursuant to the pharmacy’s policies and procedures, a licensed health care professional may be granted access to the pharmacy department to meet the emergent needs of a patient. A licensed health care professional may utilize the assistance of a certified pharmacy technician to locate a drug but shall not rely on the technician to verify the accuracy of the drug product obtained. 7.6(2) Pharmacy department closed. When the pharmacist is absent from the facility, the pharmacy department shall be closed and secured to prevent unauthorized access. The pharmacist in charge shall identify in policies and procedures the facility and pharmacy staff, by title or designation, who are authorized access to the pharmacy department and the specific activities that are authorized. a. Remote pharmacy services.Pursuant to rule 657—7.7(155A), the pharmacy may utilize the services of a remote pharmacist or pharmacy to provide pharmacist services to the facility when the pharmacy is closed. b. Certified pharmacy technicians.Pursuant to the pharmacy’s policies and procedures, a certified pharmacy technician may be granted access to the pharmacy department to perform authorized technical functions. In the absence of a pharmacist, a certified pharmacy technician may only dispense, deliver, or distribute a drug, including a compounded preparation and controlled substance, when the drug is verified by a pharmacist, including by a remote pharmacist. During each period of time the certified pharmacy technician is working in the pharmacy without pharmacist supervision, the technician shall document the time worked and activities performed. The documentation shall be periodically reviewed by the pharmacist in charge. A certified pharmacy technician may assist a licensed health care professional in locating a drug to meet the emergent needs of a patient but shall not provide the final verification of the accuracy of the drug obtained. c. Pharmacy support persons.Pursuant to the pharmacy’s policies and procedures, a pharmacy support person may be granted access to the pharmacy department to perform authorized nontechnical functions. During each period of time the pharmacy support person is working in the pharmacy without pharmacist supervision, the support person shall document the time worked and activities performed. The documentation shall be periodically reviewed by the pharmacist in charge. d. Licensed health care professionals.Pursuant to the pharmacy’s policies and procedures, a licensed health care professional may be granted access to the pharmacy department to meet the emergent needs of a patient. A licensed health care professional may utilize the assistance of a certified pharmacy technician to locate a drug but shall not rely on the technician to verify the accuracy of the drug product obtained. The pharmacy shall maintain documentation of such access and activities. This rule is intended to implement Iowa Code sections 124.301, 147.76, 147.107, and 155A.33.

ITEM 6. Amend rule 657—7.7(155A) as follows:

657—7.7(155A) Verification by remote pharmacist. A hospital pharmacy may contract with anotheran Iowa-licensed pharmacyor pharmacist for remote pharmacist preview and verification of patient-specific drugs or devices ordered for a patient. Contracted services may include pharmacist order entry pursuant to subrule 7.8(3)services, including medication order entry and review, final product verification, and provision of drug information. Pharmaciesand pharmacists entering into a contract or agreement pursuant to this rule shall comply with the following requirements: 7.7(1) Nonsupplanting service. A contract or agreement for remote pharmacist services shall not relieve the hospital pharmacy from employing or contracting with a pharmacist to provide routine pharmacy services within the facility. The activities authorized by this rule are intended to supplement on-site hospital pharmacy services and are not intended to eliminate the need for an on-site hospital pharmacy or pharmacist. The activities authorized by this rule are intended to increase the availability of the pharmacist for involvement in cognitive andclinical patient care activities when the pharmacy is openor to continue the provision of pharmacy services when the pharmacy is closed. The hospital pharmacy shall maintain records that demonstrate the directing of pharmacist activities to additional cognitive andclinical patient care activities, and those records shall be available for inspection by the board or anits authorized agent of the board. 7.7(2) Hospital-staff pharmacist. Nothing in this rule shall prohibit a pharmacist employed by or contracting with a hospital pharmacy for on-site services from also providing remote preview and verification of patient-specific drugs or devices ordered for a patient when the hospital pharmacy is closedpharmacist services identified in this chapter in compliance with this rule. A pharmacist previewing and verifying drug or device orders from a remote location shall have access to patient information pursuant to subrule 7.7(4) or 7.7(5), shall have access to the prescriber as provided in subrule 7.7(6), and shall be identified on the drug or device order as provided in subrule 7.7(7). 7.7(3) Licenses required. A pharmacyor pharmacist contracting with a hospital pharmacy to provide services pursuant to this rule shall maintain with the board a current Iowa pharmacylicense or pharmacist license, respectively. A remote pharmacist providing pharmacy services as an employee or agent of a contracting pharmacy pursuant to this rule shall be licensed to practice pharmacy in Iowa. 7.7(4) Electronic access to patient informationRemote access requirements. The remote pharmacist shall have secure electronic access to the hospital pharmacy’s patient information system and to all other electronic systems that the on-site pharmacist has access to when the pharmacy is open. The remote pharmacist shall receive training in the use of the hospital’s electronic systems.A pharmacist providing services from a remote location shall: a. Have secure electronic access to the hospital’s patient information system on which the pharmacist has been adequately trained, b. Have access to the patient’s health care team to discuss any concerns identified during the pharmacist’s review of the patient’s information or medication order, c. Have secure access to any other electronic systems the pharmacist would otherwise have access to in the facility, d. Have access to sufficient references to adequately meet the needs of the patients served, and e. When involved in review or verification, be identified, by name or unique identifier and function performed, on the drug or device order. 7.7(5) Nonelectronic patient information. If a hospital’s patient information is not maintained in an electronic data system or if the hospital pharmacy is not able to provide remote electronic access to the patient information system, the hospital pharmacy may petition for a waiver of subrule 7.7(4) pursuant to 657—Chapter 34 and this subrule. In addition to the information required pursuant to 657—Chapter 34, the petition for waiver shall identify the hospital pharmacy’s alternative to the electronic sharing of patient information, shall explain in detail how the alternative method will ensure timely provision of patient information necessary for the remote pharmacist to effectively review the patient’s drug regimen and history, and shall detail the processes involved in the alternative proposal including identification of all individuals involved in each of those processes. 7.7(6) Access to prescriber. The remote pharmacist shall be able to contact the prescriber to discuss any concerns identified during the pharmacist’s review of the patient’s information. 7.7(7) Pharmacist identified. The record of each patient-specific drug or device order processed pursuant to this rule shall identify, by name or other unique identifier, each pharmacist involved in the preview and verification of the order. The record of each patient-specific drug or device visually verified pursuant to this rule shall identify, by name or other unique identifier, each pharmacist involved in the visual verification of the product.

ITEM 7. Amend rule 657—7.8(124,126,155A) as follows:

657—7.8(124,126,155A) Drug distribution and control. Policies and procedures governing drug distribution and control shall be established pursuant to rule 657—8.3(155A) with input from other involved hospital staff such as physicians and nurses, from committees such as the pharmacy and therapeutics committee or its equivalent, and from any related patient care committee. It is essential that the pharmacist in charge or designee routinely be available to or on all patient care areas to establish rapport with the personnel and to become familiar with and contribute to medical and nursing procedures relating to drugs. 7.8(1) Drug preparation. Control and adequate quality assurance procedures needed to ensure that patients receive the correct drugs at the proper times shall be established pursuant to rule 657—8.3(155A). a. Hospitals shall utilize a unit dose dispensing system pursuant to rule 657—22.1(155A). All drugs dispensed by the pharmacy for administration to patients shall be in single unit or unit dose packages if practicable unless the dosage form or drug delivery device makes it impracticable to package the drug in a unit dose or single unit package. (1) Established policies and procedures shall identify situations when drugs may be dispensed in other than unit dose or single unit packages outside the unit dose dispensing system. (2) The need for nurses to manipulate drugs prior to their administration shall be minimized. b. Pharmacy personnel shall, except as specified in policies and procedures, prepare allAll sterileand nonsterile compounded productsshall be prepared in conformance with 657—Chapter 20. c. Pharmacy personnel shall compound or prepare drug formulations, strengths, dosage forms, and packages useful in the care of patients. 7.8(2) Drug formulary. Established policies and procedures shall include a current formulary of drug products approved for use in the institution and shall include specifications for those drug products. 7.(3) 7.8(2) Medication orders. Except as provided in subrule 7.8(14) or this subrule, a pharmacist shall receive a copy of an original written medication order for review except when the prescriber directly enters the medication order into an electronic medical record system or when the prescriber issues a verbal medication order directly to a registered nurse or pharmacist who then enters the order into an electronic medical record system.Except to meet the emergent needs of a patient, no drug or device shall be dispensed or made available for patient administration prior to the issuance of a valid medication order and appropriate pharmacist review. a. Verbal order.The use of verbal orders shall be minimized. All verbal orders shall be read back to the prescriber, and the read back shall be documented with or on the order. b. Written order not entered by prescriber.If an individual other than the prescriber enters a medication order into an electronic medical record system from an original written medication order, thea pharmacist shall review and verify the entry against the original written order before the drug is dispensedor made available for administration except for emergency use, when the pharmacy is closed, or as provided in rule 657—7.7(155A). c. Order entered when pharmacy closed.When the pharmacy is closedand remote pharmacist services are not available, a registered nurse or pharmacist may enter a medication order into an electronic medical record system for the purpose of creating an electronic medication administration record and, except when a pharmacist entered the order, a pharmacist shall verify the entry against the original written medication order, if such written order exists, as soon as practicable. d. System security.Hospitalwide and pharmacy stand-alone computer systems shall be secure against unauthorized entry. System login or access credentials issued to an authorized system user shall not be shared or disclosed to any other individual. e. d. Abbreviations and chemical symbols on orders.The use of abbreviations and chemical symbols on medication orders shall be discouraged but, if used, shall be limited to abbreviations and chemical symbols approved by the appropriate patient care committee. 7.(4) 7.8(3) Stop order. A written policy or other system concerning stop orders shall be established to ensure that medication orders are not inappropriately continued. 7.(5) 7.8(4) Emergency drug supplies and floor stock. SuppliesPursuant to policies and procedures, supplies of drugs for use in medical emergencies shall be immediately available at each nursing unit or service area as specified in policies and procedures. Authorized stocks shall be periodically reviewed in a multidisciplinary manner. All drug storage areas within the hospitalfacility shall be routinely inspected to ensure that no outdated or unusable items are presentavailable for administration and that all stock items are properly labeled and stored. 7.(6) 7.8(5) Disaster services. The pharmacy shall be prepared to provide drugs and pharmaceutical services in the event of a disaster affecting the availability of drugs or internal access to drugs or access to the pharmacy. 7.(7) 7.8(6) Drugs brought into the institutionfacility. Established policies and procedures shall determine those circumstances when patient-owned drugs brought into the institutionfacility may be administered to a hospitalthe patient and shall identify procedures governing the use and security of drugs brought into the institutionfacility. Procedures shall address identification of the drug and methods for ensuring the integrity of the product prior to permitting its use by the patient. The use of patient-owned drugs shall be minimized to the greatest extent possible. 7.(8) 7.8(7) Samples. The use of drug samples within the institution shall be eliminated to the extent possible. Sample use is prohibited for hospital inpatient use. If the use of drug samples is permitted for hospital outpatients, that use of samples shall be controlled and the samples shall be distributed through the pharmacy or through a process developed in cooperation with the pharmacy and the institution’s appropriate patient care committee, subject to oversight by the pharmacy.For the purposes of this subrule, “samples” shall not include initiation doses provided by a manufacturer’s long-acting antipsychotic medication initiation program. 7.(9) 7.8(8) Investigational drugs. If investigational drugs are used in the institutionfacility: a. A pharmacist shall be a member of the institutional review boardor its equivalent. b. The pharmacy shall be responsible, in cooperation with the principal investigator, for providing information about investigational drugs used in the institutionfacility and for the distribution and control of those drugs. 7.(10) 7.8(9) Hazardous drugs and chemicals. Policies and procedures for handling drugs and chemicals that are known occupational hazards shall be established pursuant to rule 657—8.3(155A). The procedures shall maintain the integrity of the drug or chemical and protect hospitalfacility personnel. 7.(11) 7.8(10) Leaveand discharge meds. Labeling of prescription drugsmedications for a patient on leave from the facility for a period in excess of 24 hoursor being discharged from the facility shall comply with 657—subrule 6.10(1). The dispensing pharmacist shall be responsible for packaging and labeling leave meds in compliance with this subrule. 7.8(12) Discharge meds. Drugs authorized for a patient being discharged from the facility shall be labeled in compliance with 657—subrule 6.10(1) before the patient removes those drugs from the facility premises. The dispensing pharmacist shall be responsible for packaging and labeling discharge meds in compliance with this subrule. 7.(13) 7.8(11) Own-use outpatient prescriptions. If the hospital pharmacy dispenses own-use outpatient prescriptions, the pharmacist shall comply with all requirements of 657—Chapter 6 except rule 657—6.1(155A). 7.(14) 7.8(12) Influenza and pneumococcal vaccines. As authorized by federal law, a written or verbal patient-specific medication administration order shall not be required prior to administration to an adult patient of influenza and pneumococcal vaccines pursuant to physician-approved hospitalfacility policy and after the patient has been assessed for contraindications. Administration shall be recorded in the patient’s medical record. 7.8(13) Accountability of stock supply. An individual who administers a controlled substance from a non-patient-specific stock supply in a facility shall personally document on a separate readily retrievable record system each dose administered, wasted, or returned to the pharmacy. Such documentation shall not be delegated to another individual. Wastage documentation shall include the signature or unique electronic signature or identification of a witnessing licensed health care practitioner. Distribution records for non-patient-specific floor-stocked controlled substances shall include the following information: a. Patient’s name; b. Prescriber who ordered the drug; c. Drug name, strength, dosage form, and quantity; d. Date and time of administration; e. Signature or unique electronic signature of the individual administering the controlled substance; f. Returns to the pharmacy; g. Waste, which is required to be witnessed and cosigned by another licensed health care practitioner.

ITEM 8. Amend rule 657—7.9(124,155A) as follows:

657—7.9(124,155A) Drug information. Established policies and procedures shall include the provision to the institution’sfacility’s staff and patients of accurate, comprehensive information about drugs and their use. The pharmacy shall serve as the institution’sfacility’s center for drug information. 7.9(1) Staff education. The pharmacist shall keep the institution’s staff well informed about the drugs used in the institution and their various dosage forms and packagings. 7.9(2) Patient education. The pharmacist shall help ensure that all patients are given adequate information about the drugs that they receive. This is particularly important for ambulatory, home care, and discharged patients. These patient education activities shall be coordinated with the nursing and medical staffs and patient education department, if any.

ITEM 9. Amend rule 657—7.10(124,155A) as follows:

657—7.10(124,155A) Ensuring rational drug therapy. An important aspect of pharmaceutical services is that of maximizing rational drug use. Policies and procedures for ensuring the quality of drug therapy shall be established pursuant to rule 657—8.3(155A).For the purpose of this rule, “professional pharmacy staff” means the professional employees of the pharmacy, including pharmacists, pharmacy technicians, and pharmacist-interns. 7.10(1) Patient profile. Sufficient patient information shall be collected, maintained, and reviewed by the pharmacist to ensure meaningful and effective participation in patient care. This requires that a drug profile be maintained for each patient receiving care at the hospital. A pharmacist-conducted drug history from patients may be useful in this regard.The pharmacy shall maintain for each patient receiving care at the hospital a patient profile, to include but not be limited to drug history. Sufficient patient information to ensure meaningful and effective patient care shall be collected, maintained, and reviewed by professional pharmacy staff pursuant to policies and procedures.a. Appropriate clinical information about patients shall be available and accessible to the pharmacist for use in daily practice.b. The pharmacist shallUpon review eachof a patient’s current drug regimen andclinical profile, the pharmacist shall directly communicate any suggested changes to the prescriberpatient’s health care team. 7.10(2) Adverse drug events. Established policies and procedures shall include a mechanism for the reporting and review, by the committee or other appropriate medical group, of adverse drug eventsthat occur in the facility which events are reviewed by the facility’s established quality control committee. The pharmacist shall be informed of all reported adverse drug events occurring in the facility. Adverse drug events include but needare not be limited to adverse drug reactions and medication errors.

ITEM 10. Amend rule 657—7.11(124,126,155A) as follows:

657—7.11(124,126,155A) Outpatient services. No prescription drugs shall be dispensedfrom the hospital pharmacy to patientstreated in a hospital outpatient setting. If a need is established for the dispensing of a prescription drug to an outpatient, a prescription drug order shall be provided to the patientissued to be filled at a pharmacy of the patient’s choice. 7.11(1) Definitions. For the purposes of this rule, the following definitions shall apply: "Emergency department patient" means an individuala patient who is examined and evaluated in the emergency department. "Outpatient" means an individuala patient who was examined and evaluated by a prescriber who determined the individual’spatient’s need for the administration of a drug or device, which individualwhen the patient presents to the hospital outpatient setting with a prescription or order for administration of a drug or device. “Outpatient” does not include an emergency department patient. "Outpatient medication order" means a writtenan order fromissued by a prescriber or an oral or electronic order from a prescriber or the prescriber’s authorized agentpursuant to rules of the board for administration of a drug or device. An outpatient medication order may authorize continued or periodic administration of a drug or device for a period of time and frequency determined by the prescriber or by hospital policy, not to exceed legal limits for the refilling of a prescription drug order. 7.11(2) Administration in the outpatient setting. Drugs shall be administered only to outpatients who have been examined and evaluated by a prescriber who determined the patient’s need for the drug therapy ordered. a. Accountability.Established policies and procedures shall include a system of drug control and accountability in the outpatient setting. The system shall ensure accountability of drugs incidental to outpatient nonemergency therapy or treatment. Drugs shall be administered only in accordance with the system. b. Controlled substances.Controlled substances maintained in the outpatient setting are kept for use by or at the direction of prescribers for the nonemergency therapy or treatment of outpatients. In order to receivehave a controlled substanceadministered, a patient shall be examined in the outpatient setting or in an alternate practice setting or office by a prescriber who shall determine the patient’s need for the drug. If the patient is examined in a setting outsideother than the outpatient setting, the prescriber shall provide the patient withissue a written prescription or order to be presented atfor administration of the drug in the hospital outpatient setting. c. Outpatient medication orders.A prescriber may authorize, by outpatient medication order, the periodic administration of a drug to an outpatient. (1) Schedule II controlled substance. An outpatient medication order for administration of a Schedule II controlled substance shall be writtenissued pursuant to federal regulation and board rules and, except as provided in rule 657—10.29(124) regarding the issuance of multiple Schedule II prescriptions, may authorize the administration of an appropriate amount of the prescribed substance for a period not to exceed 90 days from the date ordered. (2) Schedule III, IV, or V controlled substance. An outpatient medication order for administration of a Schedule III, IV, or V controlled substance shall be writtenissued pursuant to federal regulation and board rules and may be authorized for a period not to exceed six months from the date ordered. (3) Noncontrolled substance. An outpatient medication order for administration of a noncontrolled prescription drug may be authorized for a period not to exceed 18 months from the date ordered. 7.11(3) Samples. If the use of drug samples is permitted for hospital outpatients, that use of samples shall be controlled and the samples shall be distributed through the pharmacy or through a process developed in cooperation with the pharmacy and the facility’s appropriate patient care committee, subject to oversight by the pharmacy.

ITEM 11. Amend rule 657—7.12(124,126,155A) as follows:

657—7.12(124,126,155A) Drugs in the emergency department. Drugs maintained in the emergency department are kept for use by or at the direction of prescribers in the emergency department. Drugs shall be administered or dispensed only to emergency department patients. For the purposes of this rule, “emergency department patient” means an individuala patient who is examined and evaluated in the emergency department. 7.12(1) Accountability. Established policies and procedures shall include a system of drug control and accountability in the emergency department. The system shall identify drugs of the nature and type to meet the immediateemergency needs of emergency department patients. Drugs shall be administered or dispensed only in accordance with the system. 7.12(2) Controlled substances. Controlled substances maintained in the emergency department are kept for use by or at the direction of prescribers in the emergency department. a. In order to receive a controlled substance, a patient shall be examined in the emergency department by a prescriber who shall determine the need for the drug. It is not permissible under state and federal regulations for a prescriber to see a patient outside the emergency department setting, or talk to the patient on the telephone, and then proceed to call the emergency department and order the administration of a stocked controlled substance upon the patient’s arrival at the emergency department except as provided in paragraph 7.12(2)“c” or “d.” b. A prescriber may authorize, without again examining the patient, the administration of additional doses of a previously authorized drug to a patient presenting to the emergency department within 24 hours of the patient’s examination and treatment in the emergency department. c. In an emergency situation when a health care practitioner authorized to prescribe controlled substances is not available on site, and regardless of the provisions of paragraph 7.12(2)“a,” the emergency department nurse may examine the patient in the emergency department and contact the on-call prescriber. The on-call prescriber may then authorize the nurse to administer a controlled substance to the patient pending the arrival of the prescriber at the emergency department. As soon as possible, the prescriber shall examine the patient in the emergency department and determine the patient’s further treatment needs. d. In an emergency situation when a health care practitioner authorized to prescribe controlled substances examines a patient in the prescriber’s office and determines a need for the administration of a controlled substance, and regardless of the provisions of paragraph 7.12(2)“a,” the prescriber may direct the patient to present to the emergency department, with a valid written prescription or order for the administration of thea controlled substancefor which the prescriber has issued a prescription in compliance with federal regulation and board rules. As soon as possible, the prescriber shall examine the patient in the emergency department and determine the patient’s further treatment needs. 7.12(3) Drug dispensing. In those facilities with 24-hour pharmacy services, onlyOnly a pharmacist or prescriber may dispense any drugs to an emergency department patient. In those facilities located in an area of the state where 24-hour outpatient or 24-hour on-call pharmacy services are not available within 15 miles of the hospital, and which facilities are without 24-hour outpatient pharmacy services,pursuant to the provisions of this rule shall apply. a. Responsibility.Pursuant to rule 657—8.3(155A),policies and procedures shall be established to ensure the accuracy and labeling of prepackaged drugs shall be ensured and accurate records of dispensing of drugs from the emergency department shall be maintained. (1) Prepackaging. Except as provided in subrule 7.12(4), drugs dispensed to an emergency department patient in greater than a 24-hour supply may be dispensed only in prepackaged quantities not to exceed a 72-hour supply or the minimum prepackaged quantity in suitable containers, except that a seven-dayan authorized supply of doxycyclinea drug provided through the department of public health pursuant to the crime victim compensation program of the Iowa department of justice may be dispensed for the treatment of a victim of sexual assault. Prepackaged drugs shall be prepared pursuant to the requirements of rule 657—22.3(126). (2) Labeling. Drugs dispensed pursuant to this paragraph shall be appropriately labeled as required in paragraph 7.12(3)“b,” including necessary auxiliary labels. b. Prescriber responsibility.Except as provided in subrule 7.12(4), a prescriber who authorizesthe dispensing of a prescription drug to an emergency department patient is responsible for the accuracy of the dispensed drug and for the accurate completion of label information pursuant to this paragraph, including when any portion of the dispensing process is delegated to a licensed nurse under the supervision of the prescriber. (1) Labeling. Except as provided in subrule 7.12(4), at the time of delivery of the drug the prescriber shall appropriately complete the label suchbe responsible for ensuring that the dispensing container bears a label with at least the following information:

Name and address of the hospital;
Date dispensed;
Name of prescriber;
Name of patient;
Directions for use;
Name, quantity, and strength of drug.

(2) Delivery of drug to patient. Except as provided in subrule 7.12(4), the prescriber, or a licensed nurse under the supervision of the prescriber, shall give the appropriately labeled, prepackagedpackaged drug to the patient or patient’s caregiver. The prescriber, or a licensed nurse under the supervision of the prescriber, shall explain the correct use of the drug and shall explain to the patient that the dispensing is for an emergency or starter supply of the drug. If additional quantities of the drug are required to complete the needed course of treatment, the prescriber shall provide the patient withissue a prescription for the additional quantitiesto be filled at a pharmacy of the patient’s choice. 7.12(4) Use of InstyMedsan outpatient point-of-care automated dispensing system(OPCADS). A hospital located in an area of the state where 24-hour outpatient pharmacy services are not available within 15 miles of the hospital may implement the InstyMedsutilize an outpatient point-of-care automated dispensing system(OPCADS) in the hospital emergency department only as provided by this subrule.For the purpose of this rule, an OPCADS is a secure dispensing system which contains prepackaged, pharmacist-verified medications for dispensing to a patient upon issuance of a valid prescription by a prescriber. The OPCADS shall be owned by the facility, shall be operated under the facility’s hospital pharmacy license, shall not be issued a separate general or limited use pharmacy license, and shall not provide any financial incentive for use to any prescriber employed or under contract with the emergency department. a. Persons with access to the dispensing machineOPCADS for the purposes of stocking, inventory, and monitoring shall be limited to pharmacists, pharmacy technicians, and pharmacist-interns. b. The InstyMeds dispensing systemOPCADS shall be used only in the hospital emergency department for the benefit of patients examined or treated in the emergency departmentwhen the benefit to the patient outweighs the burden on the patient to obtain the medication elsewhere. c. The dispensing machineOPCADS shall be located in a secure and professionally appropriate environment. d. The stock of drugs maintained and dispensed utilizing the InstyMeds dispensing systemOPCADS shall be limited to acute care drugs provided in appropriate quantities for a 72-hour supply or the minimum commercially available package size, except that antimicrobials may be dispensed in a quantity to provide the full course of therapy. e. Drugs dispensed utilizing the InstyMeds dispensing systemOPCADS shall be appropriately labeled as provided in 657—subrule 6.10(1), paragraphs “a” through “g.”657—6.10(1) “a” through “g.” f. Prior to authorizing the dispensing of a drug utilizing the InstyMeds dispensing systemOPCADS, the prescriber shall offerto issue the patient the option of being provided a prescription that may be filled at thea pharmacy of the patient’s choice. g. When appropriate for an acute condition, the prescriber shall provide to the patient or the patient’s caregiver a prescription for the remainder of drug therapy beyond the supply available utilizing the InstyMeds dispensing system. During consultation with the patient or the patient’s caregiver, the prescriberor licensed nurse under the supervision of the prescriber shall clearly explain the appropriate use of the drug supplied, the need to have a prescription for any additional supply of the drug filled at a pharmacy of the patient’s choice, and the need to complete the full course of drug therapy.If additional quantities of the drug are required to complete the needed course of treatment, the prescriber shall issue a prescription for the additional quantity to be filled at a pharmacy of the patient’s choice. h. The pharmacy shall, in conjunction with the hospital emergency department, implement policies and procedures to ensure that a patient utilizing the InstyMeds dispensing systemOPCADS has been positively identified. i. The hospital pharmacist shall review the printout of drugs provided utilizing the InstyMeds dispensing system within 24 hours unless the pharmacy is closed, in which case the printout shall be reviewed during the first day the pharmacy is open following the provision of the drugs. The purpose of the review is to identify any dispensing errors, to determine dosage appropriateness, and to complete a retrospective drug use review of any antimicrobials dispensed in a quantity greater than a 72-hour supply. Any discrepancies found shall be addressed by the pharmacy’s continuous quality improvement program.

ITEM 12. Amend rule 657—7.13(124,155A) as follows:

657—7.13(124,155A) Records. Every inventory or other record required to be kept under this chapter or other board rules or under Iowa Code chapters 124 and 155A shall be kept by the pharmacy and be available for inspection and copying by the board or its representativeauthorized agent for at least two years from the date of such inventory or record unless a longer retention period is specified for the particular inventory or record. 7.13(1) Medication order information. Each original medication order contained in inpatient records shall bearinclude the following information: a. Patient name and identification number; b. Drug name, strength, and dosage form; c. Directions for use; d. Date ordered; e. Practitioner’sPrescriber’s signature or electronic signature or that of the practitioner’sprescriber’s authorized agent. 7.13(2) Medication order maintained. The original medication order shall be maintained with the medication administration record in the medical records of the patient following discharge. 7.13(3) Documentation of drug administration. Each dose of medication administered shall be properly recorded in the patient’s medical record. 7.13(4) Storage of records. Original hard-copy records shall be maintained by the pharmacy for a minimum of two years from the date of the record in accordance with this subrule. a. Records shall be maintained within the pharmacy department for a minimum of 12 months, except as provided herein. Pharmacy records less than 12 months old may be stored in a secure storage area outside the pharmacy department, including at a remote location, if the pharmacy has retained an electronic copy of the records in the pharmacy that is immediately available and if the original records are available within 48 hours of a request by the board or its authorized agent, unless such remote storage is prohibited under federal law. b. Records more than 12 months old may be maintained in a secure storage area outside the pharmacy department, including at a remote location, if the records are retrievable within 48 hours of a request by the board or its authorized agent, unless such remote storage is prohibited under federal law.

ITEM 13. Amend 657—Chapter 7, implementation sentence, as follows: These rules are intended to implement Iowa Code sections 124.301, 124.303, 124.306,124.308, 126.10, 126.11, 155A.6,155A.6A, 155A.6B, 155A.7, 155A.13,155A.15, 155A.27, 155A.28, 155A.31, and 155A.33 through 155A.36, 155A.38, 155A.41, 155A.43, and 155A.44.

ITEM 14. Amend subrule 8.5(3) as follows: 8.5(3) Secure barrier. A pharmacy department shall be closed and secured in the absence of the pharmacist except as provided in rule 657—6.7(124,155A) or 657—7.6(124,155A)657—7.5(124,155A). To ensure that secure closure, the pharmacy department shall be surrounded by a physical barrier capable of being securely locked to prevent entry when the department is closed. A secure barrier may be constructed of other than a solid material with a continuous surface if the openings in the material are not large enough to permit removal of items from the pharmacy department by any means. Any material used in the construction of the barrier shall be of sufficient strength and thickness that it cannot be readily or easily removed, penetrated, or bent. ARC 4007CProfessional Licensing and Regulation Bureau[193]Notice of Intended Action

Proposing rule making related to organization and operation and providing an opportunity for public comment

The Professional Licensing and Regulation Bureau hereby proposes to amend Chapter 1, “Organization and Operation,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code sections 546.3 and 546.10.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapters 542, 542B, 543B, 544A, 544B and 544C and section 546.10.Purpose and Summary The Professional Licensing and Regulation Bureau of the Banking Division coordinates the functions of six professional licensing boards. Chapter 1 describes the organization of the Bureau. The proposed amendments update the chapter to reflect legislative changes to the Bureau and its boards. The proposed amendment relating to the composition of the Engineering and Land Surveying Examining Board reflects a change made in 2018 Iowa Acts, House File 2382. The proposed amendment relating to the Architectural Examining Board changes the terminology from “registered” to “licensed” as a result of 2017 Iowa Acts, Senate File 408. The change of title from “registered” to “professional” relating to the membership of the Landscape Architectural Examining Board reflects the terminology used in Iowa Code section 544B.3. Striking the subrule providing for the Real Estate Appraiser Examining Board is the result of 2016 Iowa Acts, House File 2436. The proposed amendment in Item 4 allows for staff to remove abandoned applications from the licensing database.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 Bureau for a waiver of the discretionary provisions, if any, pursuant to 193—Chapter 5. 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 Bureau no later than 4:30 p.m. on October 16, 2018. Comments should be directed to: Lori SchraderBachar Professional Licensing and Regulation Bureau 200 East Grand Avenue, Suite 350 Des Moines, Iowa 50309 Phone: 515.725.9030 Email: lori.schraderbachar@iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 16, 2018 9 a.m.Bureau Offices, Suite 350 200 East Grand Avenue 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 Bureau and advise of specific needs. 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 193—1.4(546) as follows:

193—1.4(546) Purpose of the bureau. The bureau exists to coordinate the administrative support for the following sevensix professional licensing boards: 1.4(1) The engineering and land surveying examining board is a seven-member board appointed by the governor and confirmed by the senate. It is composed of fourthree professional engineers, onetwo land surveyorsurveyors, and two public members. The board administers Iowa Code chapter 542B, Professional Engineers and Land Surveyors, and board rules published under agency number [193C] in the Iowa Administrative Code. 1.4(2) The accountancy examining board is an eight-member board appointed by the governor and confirmed by the senate. The board is composed of five certified public accountants, two public members, and one licensed public accountant. The board administers Iowa Code chapter 542, Public Accountants, and board rules published under agency number [193A] in the Iowa Administrative Code. 1.4(3) The real estate commission is a seven-member commission appointed by the governor and confirmed by the senate. It is composed of five members, one of whom must be a salesperson, licensed under Iowa Code chapter 543B and two public members. The commission administers Iowa Code chapters 543B, Real Estate Brokers and Salespersons; 543C, Sales of Subdivided Land Outside of Iowa; 557A, Time-Shares; and commission rules published under agency number [193E] in the Iowa Administrative Code. 1.4(4) The architectural examining board is a seven-member board appointed by the governor and confirmed by the senate. It is composed of five registeredlicensed architects and two public members. The board administers Iowa Code chapter 544A, RegisteredLicensed Architects, and board rules published under agency number [193B] in the Iowa Administrative Code. 1.4(5) The landscape architectural examining board is a seven-member board appointed by the governor and confirmed by the senate. It is composed of five registeredprofessional landscape architects and two public members. The board administers Iowa Code chapter 544B, Landscape Architects, and board rules published under agency number [193D] in the Iowa Administrative Code. 1.4(6) The real estate appraiser examining board is a seven-member board appointed by the governor and confirmed by the senate. It is composed of five certified real estate appraisers and two public members. The board administers Iowa Code chapter 543D, Real Estate Appraisals and Appraisers, and board rules published under agency number [193F] in the Iowa Administrative Code. 1.(7) 1.4(6) The interior design examining board is a seven-member board appointed by the governor and confirmed by the senate. It is composed of five registered interior designers and two public members. The board administers Iowa Code chapter 544C, Registered Interior Designers, and board rules published under agency number [193G] in the Iowa Administrative Code.

ITEM 2. Amend rule 193—1.9(272C,542,542B,543B,543D,544A,544B,544C), parenthetical implementation statute, as follows:

193—1.9(272C,542,542B,543B,543D,544A,544B,544C) Applicant contact information.

ITEM 3. Amend rule 193—1.10(272C,542,542B,543B,543D,544A,544B,544C), parenthetical implementation statute, as follows:

193—1.10(272C,542,542B,543B,543D,544A,544B,544C) Newsletter.

ITEM 4. Adopt the following new rule 193—1.11(272C,542,542B,543B,544A,544B,544C):

193—1.11(272C,542,542B,543B,544A,544B,544C) Applications. Unless otherwise regulated by an individual board’s rules, abandoned applications shall be deemed withdrawn. An application is abandoned if the applicant has not accessed or modified the application through the bureau’s electronic licensing database within the preceding six months.ARC 4035CProfessional Licensure Division[645]Notice of Intended Action

Proposing rule making related to licensure by endorsement and providing an opportunity for public comment

The Board of Speech Pathology and Audiology hereby proposes to amend Chapter 300, “Licensure of Speech Pathologists and Audiologists,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code chapters 154F and 272C and section 147.76.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapters 147, 154F and 272C.Purpose and Summary Applicants for licensure by endorsement are not able to provide examination scores from the testing center when it has been more than ten years since the examination was taken because the examination company, Praxis, purges these scores after a decade has passed. The Board has granted waivers for applicants and, in review of rule 645—300.9(147), has found the rule unduly restrictive. The proposed amendment allows applicants for licensure by endorsement to satisfy the requirement of proof of passing the Board-designated examination by providing evidence of a current clinical competence certification through the American Speech-Language-Hearing Association (ASHA), which confirms the completion of clinical hours and passing of the Praxis examination.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 645—Chapter 18. 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 Board no later than 4:30 p.m. on October 16, 2018. Comments should be directed to: Venus Vendoures Walsh Professional Licensure Division Department of Public Health Lucas State Office Building 321 East 12th Street Des Moines, Iowa 50319 Phone: 515.242.6529 Email: venus.vendoures-walsh@idph.iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 16, 2018 8:30 to 9 a.m. Fifth Floor Board Conference Room 526 Lucas 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. 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 rule 645—300.9(147) as follows:

645—300.9(147) Licensure by endorsement. 300.9(1) An applicantThe board may issue a license by endorsement to any applicant from the District of Columbia or another state, territory, province or foreign country who has been a licensed speech pathologist or audiologist under the laws of another jurisdiction shall file an application for licensure by endorsement with the board office. The board may receive by endorsement any applicant from the District of Columbia or another state, territory, province or foreign country who:

Submits to the board a completed application;
Pays the licensure fee;
Shows evidence of licensure requirements that are similar to those required in Iowa;
Shows evidence of a current ASHA certificate or at least nine months of full-time clinical experience or its equivalent;
Shows evidence that the Praxis Examination scores have been sent directly from the examination service to the board;
Provides official copies of the academic transcripts; and
Provides verification of license(s) from every jurisdiction in which the applicant has been licensed, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification direct from the jurisdiction’s board office if the verification provides:
Licensee’s name;
Date of initial licensure;
Current licensure status; and
Any disciplinary action taken against the license.

300.9(2) The applicant shall complete a board-approved application packet. Application forms may be obtained from the board’s website (www.idph.iowa.gov/licensure) or directly from the board office. All applications shall be sent to Board of Speech Pathology and Audiology, Professional Licensure Division, Fifth Floor, Lucas State Office Building, Des Moines, Iowa 50319-0075. Each application shall be submitted with the following: a. Payment of the appropriate fees payable to the Board of Speech Pathology and Audiology. The fees are nonrefundable. b. Verification of license(s) from every jurisdiction in which the applicant has been licensed, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification sent directly from the jurisdiction’s board office if the verification provides: (1) Licensee’s name; (2) Date of initial licensure; (3) Current licensure status; and (4) Any disciplinary action taken against the license. c. Evidence of current ASHA certification or submission of documents required under 300.3(4)“b.”ARC 4036CProfessional Licensure Division[645]Notice of Intended Action

Proposing rule making related to code of ethics and providing an opportunity for public comment

The Board of Speech Pathology and Audiology hereby proposes to amend Chapter 304, “Discipline for Speech Pathologists and Audiologists,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code chapter 272C and Iowa Code section 147.76.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapters 147, 154F and 272C.Purpose and Summary This proposed amendment updates the chapter to incorporate language used in the American Academy of Audiology (AAA) and the American Speech-Language-Hearing Association (ASHA) codes of ethics. This amendment includes a reference to the reporting requirements in Iowa Code section 135.131 and 641—Chapter 3 as the requirements relate to newborn and infant care screening evaluations.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 645—Chapter 18. 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 Board no later than 4:30 p.m. on October 16, 2018. Comments should be directed to: Venus Vendoures Walsh Professional Licensure Division Iowa Department of Public Health Lucas State Office Building 321 East 12th Street Des Moines, Iowa 50319 Phone: 515.242.6529 Email: venus.vendoures-walsh@idph.iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 16, 2018 8:30 to 9 a.m. Fifth Floor Board Conference Room 526 Lucas 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. 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 304.2(31) as follows: 304.2(31) Violation of the following code of ethics: a. Licensees shall provide ethical, professional services, conduct research with honesty and compassion, and respect the dignity, worth and rights of those served. a. b. Claims of expected clinical results shall be based upon sound evidence and shall accurately convey the probability and degree of expected improvement. b. c. Records shall be adequately maintained for the period of time required by applicable state and federal laws. c. d. Persons served professionally or the files of such persons will be used for teaching or research purposes only after obtaining informed consent from those persons or from the legal guardians of such persons. d. e. Information of a personal or professional nature obtained from persons served professionally will be released only to individuals authorized by the persons receiving professional service or to those individuals to whom release is required by law. f. Licensees who engage in research shall comply with all institutional, state, and federal regulations that address any aspects of research, including those that involve human participants and animals, such as those promulgated in the current Responsible Conduct of Research by the U.S. Office of Research Integrity. g. Individuals in administrative or supervisory roles shall not require or permit their professional staff to provide services or conduct clinical activities that compromise the staff members’ independent and objective professional judgment. e. h. Relationships between professionals and between a professional and a client shall be based on high personal regard and mutual respect without concern for race, religious preference, sex, or age, ethnicity, gender identity/gender expression, sexual orientation, national origin, disability, culture, language or dialect. f. i. Referral of clients for additional services or evaluation and recommendation of sources for purchasing appliances shall be without any consideration for financial or material gain to the licensee making the referral or recommendation for purchase. g. j. Licensees who dispense products to persons served professionally shall provide clients with freedom of choice for the source of services and products. h. k. Failure to comply with current Food and Drug Administration regulations 21 CFR §801.420, “Hearing aid devices; professional and patient labeling,” and 21 CFR §801.421, “Hearing aid devices; conditions for sale.” l. Licensees shall comply with universal newborn and infant hearing screening requirements within Iowa Code section 135.131 and 641—Chapter 3.ARC 4034CPublic Health Department[641]Notice of Intended Action

Proposing rule making related to concussion and brain injury and providing an opportunity for public comment

The Public Health Department hereby proposes to adopt Chapter 54, “Concussion and Brain Injury Return-to-Play Protocol,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in 2018 Iowa Acts, House File 2442.State or Federal Law Implemented This rule making implements, in whole or in part, 2018 Iowa Acts, House File 2442.Purpose and Summary The proposed rules describe the return-to-play protocol for returning a student to participation in any extracurricular interscholastic activity after the student shows signs, symptoms, or behaviors consistent with a concussion or brain injury. The return-to-play protocol is based on peer-reviewed scientific evidence consistent with the guidelines of the Centers for Disease Control and Prevention of the United States Department of Health and Human Services. The Department worked in cooperation with the Iowa High School Athletic Association and the Iowa Girls High School Athletic Union in the drafting of the proposed rules. 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 variance and 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 State Board of Health no later than 4:30 p.m. on October 16, 2018. Comments should be directed to: Maggie Ferguson Department of Public Health Lucas State Office Building 321 East 12th Street Des Moines, Iowa 50319 Email: maggie.ferguson@idph.iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 16, 2018 10:30 to 11:30 a.m. Room 518 Lucas 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 Department and advise of specific needs. 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 641—Chapter 54: CHAPTER 54CONCUSSION AND BRAIN INJURY RETURN-TO-PLAY PROTOCOL

641—54.1(280) Purpose. This chapter describes the return-to-play protocol for concussion and brain injury to be adopted by July 1, 2019, by the board of directors of each school district and the authorities in charge of each accredited nonpublic school with enrolled students who participate in an extracurricular interscholastic activity in grades seven through twelve.

641—54.2(280) Definitions. For the purpose of these rules, the following definitions shall apply. "Asymptomatic" means the student is no longer showing signs, symptoms, or behaviors consistent with a concussion or brain injury. "Contest" means an interscholastic athletic game or competition. "Extracurricular interscholastic activity" means any dance or cheerleading activity or extracurricular interscholastic activity, contest, or practice governed by the Iowa high school athletic association or the Iowa girls high school athletic union that is a contact or limited contact activity as identified by the American Academy of Pediatrics. "Licensed health care provider" means a physician, physician assistant, chiropractor, advanced registered nurse practitioner, nurse, physical therapist, or athletic trainer licensed by a board designated under Iowa Code section 147.13. "Medical clearance" means written clearance from a licensed health care provider releasing the student following a concussion or brain injury to return to or commence participation in any extracurricular interscholastic activity. "Return-to-learn plan" means the plan developed by personnel of a school district or accredited nonpublic school based on guidance developed as required under 2018 Iowa Acts, House File 2442, to provide adjustments or accommodations as the student returns to the classroom. "Return-to-play" means the gradual, step-wise approach to returning a student to participation in any extracurricular interscholastic activity following a concussion or brain injury.

641—54.3(280) Return-to-play protocol. The following return-to-play step-wise process shall begin when the student who has been removed from participation in any extracurricular interscholastic activity governed by the Iowa high school athletic association or the Iowa girls high school athletic union is no longer showing signs, symptoms, or behaviors consistent with a concussion or brain injury for a minimum of 24 hours and has received written medical clearance from a licensed health care provider to return to or commence such participation. 54.3(1) Return-to-play process. Each step shall take a minimum of 24 hours. a. If the student shows signs, symptoms, or behaviors consistent with a concussion or brain injury at any step of the return-to-play protocol, the student must stop the activity and the student’s licensed health care provider or parent/guardian, or both, shall be contacted. b. If the student shows signs, symptoms, or behaviors consistent with a concussion or brain injury during this process, an additional 24-hour period of rest shall take place. After the 24-hour period of rest, the student shall drop back to the previous level when the student showed no signs, symptoms, or behaviors consistent with a concussion or brain injury and begin the progression again. 54.3(2) Return-to-play steps. Step 1Athlete has received written medical clearance from a licensed health care provider to begin the return-to-play process, AND the athlete is back to regular activities, including school, without experiencing any concussion signs, symptoms, or behaviors for a minimum of 24 hours. Step 2Low impact, light aerobic exercise. Walking or stationary cycling at slow to medium pace. No resistance/weight training. Step 3Basic exercise, such as running in the gym or on the field. No helmet or other equipment.Step 4Noncontact, sport-specific training drills (dribbling, ball handling, batting, fielding, running drills) in full equipment. Resistance/weight training may begin.Step 5Full contact practice and participation in normal training activities.Step 6Contest participation. These rules are intended to implement 2018 Iowa Acts, House File 2442. ARC 4006CReal Estate Appraiser Examining Board[193F]Notice of Intended Action

Proposing rule making related to real estate appraiser qualification criteria and providing an opportunity for public comment

The Real Estate Appraiser Examining Board hereby proposes to amend Chapter 1, “Organization and Administration,” Chapter 3, “General Provisions for Examinations,” Chapter 4, “Associate Real Property Appraiser,” Chapter 5, “Certified Residential Real Property Appraiser,” Chapter 6, “Certified General Real Property Appraiser,” and Chapter 15, “Supervisor Responsibilities,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 543D.5.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 543D.Purpose and Summary Under the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), the Appraiser Qualifications Board (AQB) establishes the Real Property Appraiser Qualification Criteria (Criteria), or the minimum education, experience, and examination requirements for real property appraisers to obtain a state certification. As of May 1, 2018, the AQB has lowered the minimum education, experience, and examination requirements. States may choose to have higher standards, but standards may not fall below the minimum requirements. The Board considered the May 1, 2018, Criteria changes and has decided to lower the educational portion to mirror that of the May 1, 2018, Criteria.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. 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 Board no later than 4:30 p.m. on October 16, 2018. Comments should be directed to: Brandy March Real Estate Appraiser Examining Board East Grand Office Park 200 East Grand Avenue, Suite 350 Des Moines, Iowa 50309 Phone: 515.725.9025 Email: brandy.march@iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 16, 2018 8:30 to 9:30 a.m. Small Conference Room, Third Floor 200 East Grand Avenue 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. 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 193F—1.19(543D) as follows:

193F—1.19(543D) January 1, 2015May 1, 2018, criteria. 1.19(1) Effective on and after January 1, 2015May 1, 2018, the AQB has changed the criteria for eligibility for registration as an associate appraiser and certification as a certified appraiser. No person may be registered as an associate appraiser or certified as a certified appraiser on or after January 1, 2015May 1, 2018, unless the person is eligible under the revisedmost recent criteria. 1.19(2) The January 1, 2015May 1, 2018, criteria were adopted by the AQB in 20112018 and have been widely disseminated, including on the board’s Web sitewebsite at: http://www.state.ia.us/government/com/ prof/appraiser/home.htmlwww.idob.state.ia.us/reap/. a. For associate appraisers, the revised criteria place a five-year restriction on the time period in which qualifying education must be completed prior to the submission of an application for associate appraiser registration and require completion of supervisory appraiser/associate coursework by both the supervisory appraiser and the associate appraiser applicant.b. For certified appraisers, the revisedThe May 1, 2018, criteria modify the conditions under which applicants for certification are eligible to take the required examinations and require a bachelor’s degree for all certified appraisers, including residential appraisers.

ITEM 2. Amend rule 193F—1.20(543D) as follows:

193F—1.20(543D) Application and work product deadlines. 1.20(1) December 31, 2014, application deadline. In order to be considered for registration as an associate appraiser or certification as a certified appraiser under the criteria in effect prior to January 1, 2015, an applicant must submit an original, fully completed application to the board office for the board’s actual receipt no later than December 31, 2014, at 4:30 p.m. 1.(2) 1.20(1) Deadline for associate appraiser applicantsSummary of registration requirements for registration as an associate. The associate appraiser and supervisory appraiser provisions are more fully set out in 193F—Chapters 4 and 15, respectively. Before submitting an application for registration with the board, a person seeking registration as an associate appraiser must complete 75 hours of appraisal education and secure a qualified supervisory appraiser. An associate appraiser applicant who submits an application to the board office after December 31, 2014, at 4:30 p.m. shall be subject to the January 1, 2015, criteria and will accordingly be subject to the five-year restriction onmust have completed all required qualifying education and the supervisory appraiser/associate courseworkprior to submitting an application for registration. 1.(3) 1.20(2) Summary of certification requirements before January 1, 2015. As more fully set out in 193F—Chapters 3, 5, and 6, a person who is in the process of completing the education, experience, and examination required for certification as a certified appraiser may not submit an application for certification to the board until all prerequisites have been satisfactorily completed. The prerequisites include the following: qualifying college and core criteria appraiser education, qualifying examination, 2,500 hours of qualifying experience in a minimum of 24 months for residential appraisers or 3,000 hours of qualifying experience in a minimum of 30 months for general appraisers, and work product review. Work product review requires numerous steps, as provided in 193F—5.6(543D) and 193F—6.6(543D). The work product review process includes the applicant’s submission of a work product experience log to the board; the board’s selection of three appraisals to review; communication of the selected appraisals to the applicant; the applicant’s submission of the three appraisals and associated work files to the board in electronic and paper formats; review of the appraisals and work files by a reviewer retained by the board; the reviewer’s submission of review reports to the board; a meeting between the applicant and the board’s work product review committee; a formal board vote at a board meeting; and communication of approval, denial, or deferral to the applicant. All of these steps must be completed before an applicant with approved work product can submit an application for certification to the board office. 1.20(4) October 1, 2014, deadline for submission of appraisals and work files. a. As a result of the minimum periods of time needed to accomplish all work product review steps summarized in 1.20(3), an applicant for certification as a certified appraiser must fully submit to the board office the three appraisals and associated work files for work product review, as provided in 193F—5.6(543D) and 193F—6.6(543D), no later than October 1, 2014. b. To allow sufficient time for board selection of three appraisals from the work product review experience log, board communication of the selected appraisals to the applicant, and applicant submission of the appraisals and work files to the board office by October 1, 2014, applicants for residential certification should submit their work product experience log to the board by September 1, 2014, and applicants for general certification should submit their work product experience log to the board by August 1, 2014. c. Applicants for certification as residential or general certified appraisers who submit appraisals and work files for work product review on or after October 2, 2014, shall be considered for certification under the January 1, 2015, criteria. If an applicant submitting appraisals and work files for work product review on or after October 2, 2014, has previously passed the required examination, the examination results will remain valid for the 24-month period of validity, as described in 193F—Chapter 3.

ITEM 3. Amend subrule 3.4(3) as follows: 3.4(3) An initial certificate shall not be issued until the applicant has demonstrated compliance with all required appraiser qualifications for certification, which include examination, educationcore criteria, a bachelor’s degreecollegiate education, and real property appraiser experience pursuant to Iowa Code section 543D.9 and 193F—Chapter 5 or 6.

ITEM 4. Amend paragraph 4.1(1)"b" as follows: b. Beginning January 1, 2015, theThe initial qualifying education must be completed no more than five years prior to the date of application.

ITEM 5. Amend subrule 4.1(2) as follows: 4.1(2) Training. Effective January 1, 2015, priorPrior to registration as an associate, a person must complete a course that complies with the specifications for course content established by the AQB specifically oriented to the requirements and responsibilities of supervisory appraisers and associate appraisers. The course must be completed before the person can obtain an associate credential. This course cannot be applied toward the required hours of qualifying or continuing education.

ITEM 6. Amend rule 193F—5.2(543D) as follows:

193F—5.2(543D) Education. Education requirements for an applicant to obtain a certificate as a certified residential real property appraiser shall be in compliance with the criteria as set forth by the Appraiser Qualifications Board (AQB) of the Appraisal Foundation.If an accredited college or university (accredited by the Commission on Colleges, by a regional or national accreditation association, or by an accrediting agency that is recognized by the U.S. Secretary of Education) accepts the College-Level Examination Program© (CLEP) examination(s) and issues a transcript for the examination(s) showing the college’s or university’s approval, the CLEP credit will be considered as credit for the college course. 5.2(1) FormalCollegiate education. There are five options toward certification as a certified residential real property appraiser. An applicant must meet at least one of the five options identified in paragraphs 5.2(1)“a” through 5.2(1)“e,” below, in order to be eligible for certification as a residential real property appraiser. a. Applicants must hold an associate’s degree or higher from an accredited college, junior college, community college, or university. In lieu of the associate’s degree, an applicant shall successfully pass all of the following collegiate subject matter courses from an accredited college, junior college, community college, or university:An applicant holds a bachelor’s degree in any field of study from an accredited college or university. (1) English composition; (2) Principles of economics (micro or macro); (3) Finance; (4) Algebra, geometry, or higher mathematics; (5) Statistics; (6) Computer science; and(7) Business or real estate law. b. Total hours of equivalent college courses in lieu of an associate’s degree are 21 semester credit hours or equivalent. If an accredited college or university (accredited by the Commission on Colleges, by a regional or national accreditation association, or by an accrediting agency that is recognized by the U.S. Secretary of Education) accepts the College-Level Examination Program© (CLEP) examination(s) and issues a transcript for the examination(s) showing the college’s or university’s approval, the CLEP credit will be considered as credit for the college course.An applicant holds an associate’s degree in a field of study from an accredited college, junior college, community college, or university that relates to: (1) Business administration; (2) Accounting; (3) Finance; (4) Economics; or (5) Real estate. c. Effective January 1, 2015, applicants must hold a bachelor’s degree or higher from an accredited college or university.Successful completion of 30 semester hours of college-level courses from an accredited college, junior college, community college, or university that cover each of the following specific areas and hours: (1) English composition (3 hours); (2) Microeconomics (3 hours); (3) Macroeconomics (3 hours); (4) Finance (3 hours); (5) Algebra, geometry, or higher math (3 hours); (6) Statistics (3 hours); (7) Computer science (3 hours); (8) Business law or real estate law (3 hours); (9) Two electives in any of the above topics or in accounting, geography, agriculture, economics, business management, or real estate (3 hours each). d. Successful completion of at least 30 semester hours of College-Level Examination Program© (CLEP) examinations that cover each of the following specific areas and hours: (1) College algebra (3 semester hours); (2) College composition (6 semester hours); (3) College composition modular (3 semester hours); (4) College mathematics (6 semester hours); (5) Principles of macroeconomics (3 semester hours); (6) Principles of microeconomics (3 semester hours); (7) Introductory business law (3 semester hours); and (8) Information systems (3 semester hours). e. Any combination of paragraphs 5.2(1)“c” and 5.2(1)“d,” above, that ensures coverage of all of the topics and hours identified in paragraph 5.2(1)“c.” For purposes of determining whether coverage of the topics and hours identified in paragraph 5.2(1)“c” has occurred: (1) The college algebra CLEP examination may be considered for satisfying the algebra, geometry, or higher math requirement of paragraph 5.2(1)“c.” (2) The college composition CLEP examination may be considered for satisfying the English composition requirement of paragraph 5.2(1)“c.” (3) The college composition modular CLEP examination may be considered for satisfying the English composition requirement of paragraph 5.2(1)“c.” (4) The college mathematics CLEP examination may be considered for satisfying the algebra, geometry, or higher math requirement of paragraph 5.2(1)“c.” (5) The principles of macroeconomics CLEP examination may be considered for satisfying the macroeconomics or finance requirement of paragraph 5.2(1)“c.” (6) The principles of microeconomics CLEP examination may be considered for satisfying the microeconomics or finance requirement of paragraph 5.2(1)“c.” (7) The introductory business law CLEP examination may be considered for satisfying the business law or real estate law requirement of paragraph 5.2(1)“c.” (8) The information systems CLEP examination may be considered for satisfying the computer science requirement of paragraph 5.2(1)“c.” 5.2(2) Core criteria. In addition to the formal education in subrule 5.2(1), an applicant must complete 200 creditable class hours before taking the AQB-approved examination. All courses must be AQB-approved current core criteria to be considered creditable. The required courses and 200 hours consist of the following: a. Basic appraisal principles 30 hours b. Basic appraisal procedures 30 hours c. The 15-hour USPAP course or equivalent 15 hours d. Residential market analysis and highest and best use 15 hours e. Residential appraiser site valuation and cost approach 15 hours f. Residential sales comparison and income approaches 30 hours g. Residential report writing and case studies 15 hours h. Statistics, modeling and finance 15 hours i. Advanced residential applications and case studies 15 hours j. Appraisal subject matter electives 20 hours 5.2(3) Degree program. Credit toward core criteria qualifying education requirements may also be obtained via the completion of a degree in real estate from an accredited degree-granting college or university, provided that the college or university has had its curriculum reviewed and approved by the AQB.

ITEM 7. Amend rule 193F—5.3(543D) as follows:

193F—5.3(543D) Examination. The prerequisite for taking the AQB-approved examination is completion of 200 creditable course hours as specified in subrule 5.2(2). Effective January 1, 2015, theThe 200 creditable course hours, college or university degreecollegiate education, and all experience must be completed as specified in subrules 5.2(1) and 5.2(2) and rule 193F—5.4(543D) prior to the examination. For 5.2(2)“c,” equivalency shall be determined through the AQB Course Approval Program or by an alternate method established by the AQB. USPAP qualifying education shall be awarded only when the class is instructed by at least one AQB-certified USPAP instructor who holds a state-issued certified residential or certified general appraiser credential in active status and good standing. 5.3(1) Qualification. a. In order to qualify to sit for the certified residential real property appraiser examination, the applicant must: (1) Complete the board’s application form and provide copies of documentation of completion of all courses claimed that qualify the applicant to sit for the examination. (2) Pay the fee specified in 193F—Chapter 12. b. Effective January 1, 2015, the bachelor’s degree, educationThe core criteria, collegiate education, and experience must be completed and the documentation submitted to the board at the time of application to sit for the examination. 5.3(2) The board may verify educational credits claimed. Undocumented credits will be sufficient cause to invalidate the examination results pursuant to 193F—paragraph3.3(2)“c.” 5.3(3) Responsibility for documenting the educational credits claimed rests with the applicant. 5.3(4) An applicant must supply the original examination scores when applying for certification. Copies of the scores will not be accepted. 5.3(5) If an applicant who has passed an examination does not obtain the related appraiser credential within 24 months after passing the examination, that examination result loses its validity to support issuance of an appraiser credential. To regain eligibility for the credential, the applicant must retake and pass the examination. This requirement applies to individuals obtaining an initial certified credential or upgrading from an associate credential.

ITEM 8. Amend rule 193F—5.4(543D) as follows:

193F—5.4(543D) Supervised experience required for initial certification. Commencing with experience attained on or after July 1, 2007, allAll experience required for initial certification pursuant to Iowa Code section 543D.9 shall be performed as a registered associate real property appraiser under the direct supervision of a certified real property appraiser pursuant to the provisions of 193F—Chapter 15. 5.4(1) Acceptable experience. The board will accept as qualifying experience the documented experience attained while the applicant for initial certification was in an educational program recognized by the Appraiser Qualifications Board and Appraisal Subcommittee as providing qualifying experience for initial certification, whether or not the applicant was registered as an associate real property appraiser at the time the educational program was completed. Such programs, if approved by federal authorities, will incorporate direct supervision by a certified real property appraiser and such additional program features as to satisfy the purpose of requiring that qualifying experience be attained by the applicant as an associate real property appraiser. 5.4(2) Exceptions. a. Applicants for initial certification in Iowa who request that the board approve experience performed in the absence of registration as an associate real property appraiser may file an application for approval on a form provided by the board. The burden shall be on the applicant to establish by clear and convincing evidence all of the following: (1) The experience is qualifying experience under the substantive and documentation standards of the Appraiser Qualifications Board and Appraisal Subcommittee. (2) Denial of the application would impose an undue hardship on the applicant. (3) The nature of the experience attained is qualitatively and substantially equivalent to the experience an associate real property appraiser would receive under the direct supervision of a certified real property appraiser pursuant to the standards established in 193F—Chapter 15. (4) Approval of the application would foster the board’s goal of fair and consistent treatment of applicants. (5) A basis exists beyond the individual control of the applicant to explain why the experience at issue could not have been attained by the applicant as an associate real property appraiser under the direct supervision of a certified real property appraiser. b. Among the circumstances the board may consider favorably in ruling on an application for approval of unsupervised experience or experience attained by the applicant in the absence of registration as an associate real property appraiser are: (1) The experience was attained in a jurisdiction that, at the time, did not register associate real property appraisers or otherwise offer an associate, trainee or equivalent category of certification. (2) The applicant attained the experience while employed in a county assessor’s office engaged in mass appraisals, and the experience would otherwise qualify under applicable federal standards. (3) The experience was attained between July 1, 2007, and January 1, 2008, and the appraiser could not reasonably have become registered and associated with a supervising certified appraiser by July 1, 2007, which is the effective date of the requirement that qualifying experience be attained by the applicant as an associate real property appraiser working under the direct supervision of a certified real property appraiser.

ITEM 9. Amend subrule 5.5(2) as follows: 5.5(2) The applicant shall accumulate a total of 25002,500 hours ofresidential appraisal experience in no fewer than 24 months while in active status, of which a minimum of 1500 hours must consist of residential appraisal experience. While the hours may be cumulative, the 24 months must have elapsed before the applicant can apply to take the examination. Experience claimed must have been performed in compliance with USPAP in which the appraiser demonstrates proficiency in appraisal principles methodology, procedures and reporting conclusions. Acceptable appraisal experience includes, but is not limited to, the following: a. Fee and staff appraisal; b. Ad valorem tax appraisal; c. Review appraisal; d. Appraisal analysis; e. Appraisal consulting; f. Highest and best use analysis; and g. Feasibility analysis/study.

ITEM 10. Amend subrule 5.6(11) as follows: 5.6(11) Upon successful completion of the work product review process, an applicant will have 60 days to submit an application. Any applicationAll applications filed on or after January 1, 2015, must meet 2015the current AQB criteria.

ITEM 11. Amend subrule 5.7(1) as follows: 5.7(1) Education. a. FormalCollegiate education.Certified residential real property appraisers must satisfy the college-level education requirements as specified in rule 193F—6.2(543D). b. Core criteria.In addition to the formal education, an applicant must complete 100 creditable class hours before taking the AQB-approved examination. All courses must be AQB-approved under current core criteria to be considered creditable. The required courses and 100 hours consist of the following: (1) General appraiser market analysis and highest and best use 15 hours (2) General appraiser sales comparison approach 15 hours (3) General appraiser site valuation and cost approach 15 hours (4) General appraiser income approach 45 hours (5) General appraiser report writing and case studies 10 hours

ITEM 12. Amend subrule 6.2(1) as follows: 6.2(1) FormalCollegiate education. a. Applicants must hold a bachelor’s degree or higher from an accredited college, junior college, community college, or university. In lieu of the bachelor’s degree, an applicant shall successfully pass all of the following collegiate subject matter courses from an accredited college, junior college, community college, or university:If an accredited college or university (accredited by the Commission on Colleges, by a regional or national accreditation association, or by an accrediting agency that is recognized by the U.S. Secretary of Education) accepts the College-Level Examination Program© (CLEP) examination(s) and issues a transcript for the examination(s) showing the college’s or university’s approval, the CLEP credit will be considered as credit for the college course. An applicant who submits a master’s degree or higher as proof of the applicant’s bachelor’s degree must include an affidavit or a copy of the bachelor’s degree attesting that the bachelor’s degree is from an accredited college or university.(1) English composition;(2) Microeconomics;(3) Macroeconomics;(4) Finance;(5) Algebra, geometry, or higher mathematics;(6) Statistics;(7) Computer science;(8) Business or real estate law; and(9) Two elective courses in accounting, geography, agricultural economics, business management, or real estate. b. Total hours of equivalent college courses in lieu of a bachelor’s degree are 30 semester credit hours or equivalent. If an accredited college or university (accredited by the Commission on Colleges, by a regional or national accreditation association, or by an accrediting agency that is recognized by the U.S. Secretary of Education) accepts the College-Level Examination Program© (CLEP) examination(s) and issues a transcript for the examination(s) showing the college’s or university’s approval, the CLEP credit will be considered as credit for the college course. c. Effective January 1, 2015, applicants must hold a bachelor’s degree or higher from an accredited college or university.

ITEM 13. Amend rule 193F—6.3(543D) as follows:

193F—6.3(543D) Examination. The prerequisite for taking the AQB-approved examination is completion of 300 creditable course hours as specified in subrule 6.2(2). Effective January 1, 2015, theThe 300 core criteria hours, college or university degreecollegiate education, and all experience must be completed as specified in subrules 6.2(1) and 6.2(2) and rule 193F—6.4(543D) prior to the examination. For 6.2(2)“c,” equivalency shall be determined through the AQB Course Approval Program or by an alternate method established by the AQB. USPAP qualifying education shall be awarded only when the class is instructed by at least one AQB-certified USPAP instructor who holds a state-issued certified residential or certified general appraiser credential in active status and good standing. 6.3(1) In order to qualify to sit for the certified general real property appraiser examination, the applicant must: a. Complete the board’s application form and provide copies of documentation of completion of all courses claimed that qualify the applicant to sit for the examination. b. Pay the fee specified in 193F—Chapter 12. c. Effective January 1, 2015, theThe degree, education and experience must be completed and documentation submitted to the board at the time of application to sit for the examination. 6.3(2) The board may verify educational credits claimed. Undocumented credits will be sufficient cause to invalidate the examination results pursuant to 193F—paragraph 3.3(2)“c.” 6.3(3) Responsibility for documenting the educational credits claimed rests with the applicant. 6.3(4) An applicant must supply the original examination scores when applying for certification. Copies of the scores will not be accepted. 6.3(5) If an applicant who has passed an examination does not obtain the related appraiser credential within 24 months after passing the examination, that examination result loses its validity to support issuance of an appraiser credential. To regain eligibility for the credential, the applicant must retake and pass the examination. This requirement applies to individuals obtaining an initial certified credential or upgrading from an associate credential.

ITEM 14. Amend rule 193F—6.4(543D) as follows:

193F—6.4(543D) Supervised experience required for initial certification. Commencing with experience attained on or after July 1, 2007, allAll experience required for initial certificationto obtain certification as a certified general real property appraiser pursuant to Iowa Code section 543D.9 shall be performed as a registered associate real property appraiser under the direct supervision of a certifiedgeneral real property appraiser pursuant to the provisions of 193F—Chapter 15. 6.4(1) Acceptable experience. The board will accept as qualifying experience the documented experience attained while the applicant for initial certification was in an educational program recognized by the Appraiser Qualifications Board and Appraisal Subcommittee as providing qualifying experience for initial certification, whether or not the applicant was registered as an associate real property appraiser at the time the educational program was completed. Such programs, if approved by federal authorities, will incorporate direct supervision by a certified real property appraiser and such additional program features as to satisfy the purpose of requiring that qualifying experience be attained by the applicant as an associatea real property appraiser. 6.4(2) Exceptions. a. Applicants for initialcertified general real property certification in Iowa who request that the board approve experience performed in the absence of registration as an associate real property appraiser may file an application for approval on a form provided by the board. The burden shall be on the applicant to establish by clear and convincing evidence all of the following: (1) The experience is qualifying experience under the substantive and documentation standards of the Appraiser Qualifications Board and Appraisal Subcommittee. (2) Denial of the application would impose an undue hardship on the applicant. (3) The nature of the experience attained is qualitatively and substantially equivalent to the experience an associate real property appraiser would receive under the direct supervision of a certified real property appraiser pursuant to the standards established in 193F—Chapter 15. (4) Approval of the application would foster the board’s goal of fair and consistent treatment of applicants. (5) A basis exists beyond the individual control of the applicant to explain why the experience at issue could not have been attained by the applicant as an associate real property appraiser under the direct supervision of a certifiedgeneral real property appraiser. b. Among the circumstances the board may consider favorably in ruling on an application for approval of unsupervised experience or experience attained by the applicant in the absence of registration as an associate real property appraiser are: (1) The experience was attained in a jurisdiction that, at the time, did notrequire direct supervision or register associate real property appraisers or otherwise offer an associate, trainee or equivalenta category of certification. (2) The applicant attained the experience while employed in a county assessor’s office engaged in mass appraisals, and the experience would otherwise qualify under applicable federal standards. (3) The experience was attained between July 1, 2007, and January 1, 2008, and the appraiser could not reasonably have become registered and associated with a supervising certified appraiser by July 1, 2007, which is the effective date of the requirement that qualifying experience be attained by the applicant as an associate real property appraiser working under the direct supervision of a certified real property appraiser.

ITEM 15. Amend subrule 6.5(2) as follows: 6.5(2) The applicant shall accumulate a total of 30003,000 hours of appraisal experience in no fewer than 30 months while in active status, of which 15001,500 hours must consist of nonresidential appraisal experience. While the hours may be cumulative, the 30 months must have elapsed before an applicant can be certified. Experience claimed must have been performed in compliance with USPAP where the appraiser demonstrates proficiency in appraisal principles methodology, procedures and reporting conclusions. Acceptable appraisal experience includes, but is not limited to, the following: a. Fee and staff appraisal; b. Ad valorem tax appraisal; c. Review appraisal; d. Appraisal analysis; e. Appraisal consulting; f. Highest and best use analysis; and g. Feasibility analysis/study.

ITEM 16. Amend subrule 6.6(11) as follows: 6.6(11) Upon successful completion of the work product review process, an applicant will have 60 days to submit an application. Any applicationAll applications filed on or after January 1, 2015, must meet 2015current AQB criteria.

ITEM 17. Amend subrule 15.3(4) as follows: 15.3(4) Effective January 1, 2015, aA certified appraiser shall perform as a supervisory appraiser in Iowa only if the appraiser has completed a course that, at a minimum, complies with the specifications for course content established by the Appraiser Qualifications Board. The course is to be completed before the certified appraiser provides supervision.ARC 4022CRevenue Department[701]Notice of Intended Action

Proposing rule making related to section 179 expensing and providing an opportunity for public comment

The Revenue Department hereby proposes to amend Chapter 40, “Determination of Net Income,” Chapter 53, “Determination of Net Income,” and Chapter 59, “Determination of Net Income,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 422.68.State or Federal Law Implemented This rule making implements, in whole or in part, 2018 Iowa Acts, Senate File 2417.Purpose and Summary These rules are intended to implement 2018 Iowa Acts, Senate File 2417, which, in part, conforms Iowa’s tax laws to recent changes to the federal deduction for expensing certain depreciable business assets (section 179 deduction) but imposes Iowa-specific limitations on that deduction for certain years. These rules also implement the new special election available to taxpayers who receive section 179 deductions from pass-through entities under certain circumstances.Fiscal Impact These rules have no known fiscal impact beyond that of the legislation they are intended to implement. The fiscal impact statement is available from the Department upon request. 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).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 17, 2018. Comments should be directed to: Benjamin Clough Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306 Phone: 515.725.2176 Email: ben.clough@iowa.govPublic Hearing If requested, a public hearing at which persons may present their views orally or in writing will be held as follows: October 17, 2018 9 to 10 a.m. Auditorium Wallace 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 Department and advise of specific needs. The Department reserves the right to cancel the hearing if no timely requests for a public hearing are received.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. Rescind rule 701—40.65(422) and adopt the following new rule in lieu thereof:

701—40.65(422) Section 179 expensing. 40.65(1) In general. Iowa taxpayers who elect to expense certain depreciable business assets in the year the assets were placed in service under Section 179 of the Internal Revenue Code must also expense those same assets for Iowa income tax purposes in that year. However, for certain years, the Iowa limitations on this deduction are different from the federal limitations for the same year. This means that for some tax years, adjustments are required to determine the correct Iowa section 179 expensing deduction, as described in this rule. 40.65(2) Claiming the deduction. a. Timing and requirement to follow federal election.A taxpayer who takes a federal section 179 deduction must also take the deduction for the same asset in the same year for Iowa purposes, except as expressly provided by Iowa law or this rule. A taxpayer who takes a federal section 179 deduction is not permitted to opt out of taking the same deduction for Iowa purposes. A taxpayer who does not take a federal section 179 deduction on a specific qualifying asset is not permitted to take a section 179 deduction for Iowa purposes on that asset. b. Qualifying for the deduction.Whether a specific business asset qualifies for a section 179 deduction is determined by the Internal Revenue Code (Title 26, U.S. Code) and applicable federal regulations for both federal and Iowa purposes. c. Amount of the Iowa deduction.Generally, the Iowa deduction must equal the amount of the federal deduction taken for the same asset in the same year, subject to special Iowa limitations. The following chart provides a comparison of the Iowa and federal section 179 dollar limitations and reduction limitations. For tax years beginning on or after January 1, 2018, and before January 1, 2019, the Iowa limitations applicable to individuals and corporations are not the same; see rule 701—53.23(422) for the section 179 limitations imposed on corporations and other entities subject to the corporate income tax, and see rule 701—59.24(422) for the section 179 limitations imposed on financial institutions subject to the franchise tax.Section 179 Deduction Allowances Under Federal and Iowa LawFederalIowa Tax YearDollar LimitationReduction LimitationDollar Limitation Reduction Limitation2003$ 100,000$ 400,000$ 100,000$ 400,0002004102,000410,000102,000410,0002005105,000420,000105,000420,0002006108,000430,000108,000430,0002007125,000500,000125,000500,0002008250,000800,000250,000800,0002009250,000800,000133,000530,0002010500,0002,000,000500,0002,000,0002011500,0002,000,000500,0002,000,0002012500,0002,000,000500,0002,000,0002013500,0002,000,000500,0002,000,0002014500,0002,000,000500,0002,000,0002015500,0002,000,000500,0002,000,0002016500,0002,010,00025,000200,0002017510,0002,030,00025,000200,00020181,000,0002,500,00070,000* 280,0002019Indexed amount unknown as of 8/2/18Indexed amount unknown as of 8/2/18100,000400,0002020 and laterIowa limitations are the same as federal* The Iowa limitations for 2018 are applicable to individuals, trusts and estates, and pass-through entities other than corporations or financial institutions. For Iowa limitations applicable to corporations and entities subject to the corporate income tax, or to financial institutions subject to the franchise tax, see rules 701—53.23(422) and 701—59.24(422), respectively. d. Reduction.Both the federal and the Iowa deductions for section 179 assets are reduced (phased out dollar for dollar) for taxpayers whose total section 179 assets placed in service during a given year cost more than the amount specified (reduction limitation) for that year. Like the deduction limitation, the Iowa and federal reduction limitations are different for certain years. See paragraph 40.65(2)“c” for applicable limitations. e. Amounts in excess of the Iowa limits. (1) Recovering the excess. Due to the differences between the Iowa and federal limitations for certain years, taxpayers may have a federal section 179 deduction that exceeds the amount allowed for Iowa purposes. This excess amount is handled in different ways depending on the source of the deduction. 1. Assets placed in service by the taxpayer or entity reporting the deduction. The cost of any section 179 assets placed in service by the taxpayer in excess of the Iowa limitation for a given year may be recovered through regular depreciation under Section 168 of the Internal Revenue Code, without regard to bonus depreciation under Section 168(k). The Iowa section 179 and depreciation deductions and any basis adjustments resulting from the difference in timing of the recovery between Iowa and federal law are calculated and tracked on forms made available on the department’s website. 2. Special election for assets placed in service by a pass-through entity when the section 179 deduction is claimed by the owner of that pass-through. See subrule 40.65(3) for information on a special election available to certain owners of pass-through entities related to any section 179 deductions passed through from a partnership or other entity that, in the aggregate, exceed the Iowa limitations. (2) Application of limitation to pass-throughs. In the case of pass-through entities, section 179 limitations apply at both the entity level and the owner level. Pass-through entities that are required to file an Iowa return and that actually place section 179 assets in service should follow 40.65(2)“e”(1)“1” to account for any assets for which the total federal section 179 deductions for a given year exceeded the Iowa limitation. Owners of pass-throughs receiving section 179 deductions from one or more pass-throughs that, in the aggregate, exceed the Iowa limitations should follow 40.65(2)“e”(1)“2.” f. Income limitation.The Iowa section 179 deduction for any given year is limited to the taxpayer’s income from active conduct in a trade or business in the same manner that the section 179 deduction is limited for federal purposes. If an allowable Iowa section 179 deduction exceeds the taxpayer’s business income for a given year, any excess may be carried forward as described in paragraph 40.65(2)“g.” g. Carryforward.This paragraph applies only to amounts that do not exceed the Iowa section 179 deduction limitations for a given year but do exceed the taxpayer’s business income for that year. As with the federal deduction, allowable Iowa section 179 deductions claimed in a given year that exceed a taxpayer’s business income may be carried forward and claimed in future years. This carryforward, if any, is calculated using only amounts up to the Iowa limit. Any federal section 179 deduction the taxpayer claimed in excess of the Iowa limit is not an Iowa section 179 deduction and therefore is not eligible for the carryforward described in this paragraph. Such amounts must instead be recovered as described in paragraph 40.65(2)“e,” or in subrule 40.65(3) for taxpayers receiving the deduction from one or more pass-through entities and making the special election as described in that subrule. h. Differences in basis.Iowa adjustments for differences between the Iowa and federal section 179 deduction limitations may cause the taxpayer to have a different basis in the same asset for Iowa and federal purposes. Taxpayers are required to use forms made available on the department’s website to calculate and track these differences. 40.65(3) Section 179 deduction received from a pass-through entity. In some cases, an individual or entity that receives income from one or more pass-through entities may receive a section 179 deduction in excess of the Iowa deduction limitation listed in paragraph 40.65(2)“c” for a given year. The individual or entity may be eligible for a special election with regard to that excess section 179 deduction, as described in this subrule. a. Tax years beginning before January 1, 2018.For tax years beginning before January 1, 2018, the amount of any section 179 deduction received in excess of the Iowa deduction limitation for that year is not eligible for the special election. b. Special election available for tax years 2018 and 2019.For tax years beginning on or after January 1, 2018, but before January 1, 2020, an individual or entity, other than a corporation or an entity subject to the corporate income tax or franchise tax, that receives a section 179 deduction from one or more pass-through entities in excess of the Iowa deduction limitation for that tax year may elect to deduct the excess in future years, as described in this subrule. See rule 701—53.23(422) for special rules applicable to corporations and other entities subject to the corporate income tax, and see rule 701—59.24(422) for special rules applicable to financial institutions subject to the franchise tax. (1) This special election applies only to section 179 deductions passed through to the individual or entity by one or more other entities. (2) If the total Iowa section 179 deduction passed through to the individual or entity exceeds the federal section 179 deduction limitation for that year, the individual or entity may only use the amount up to the federal limitation when calculating the deduction under this election. Any amount in excess of the federal limitation shall not be deducted for Iowa purposes. c. Section 179 assets of an individual or entity.An individual or entity that makes the special election may not claim an Iowa section 179 deduction for any assets the individual or entity placed in service during the same year but must instead depreciate such assets using the modified accelerated cost recovery system (MACRS) without regard to bonus depreciation under Section 168(k) of the Internal Revenue Code. To the extent the individual or entity claimed a federal section 179 deduction on those assets, the Iowa depreciation deductions and any basis adjustments resulting from the difference in timing of the recovery between Iowa law and federal law are calculated and tracked on forms made available on the department’s website. d. Calculating the special election.An eligible individual or entity electing to take advantage of the special election must first add together all section 179 deductions which the individual or entity received from all relevant pass-through entities. The individual or entity must claim an aggregate Iowa section 179 deduction equal to the Iowa limit for the tax year. This amount must be subtracted from the total. Whatever remains is the amount the individual or entity will be permitted to deduct (special election deduction) in future years. e. Special election deduction. (1) Calculation. The remaining amount from paragraph 40.65(3)“d” must be divided into five equal shares. (2) Claiming the special election deduction. The individual or entity may deduct one of the five shares in each of the next five years. The dollar limitations and reduction limitations on section 179 deductions do not apply to special deduction amounts allowed over the five-year period under this paragraph. (3) Excess special deduction. The special election deduction for a given year is limited to the taxpayer’s business income for that year. Any excess may be carried forward to future years. Any amounts carried forward under this subparagraph shall be added to, and treated in the same manner as, regular Iowa section 179 deduction carryforwards as described in paragraph 40.65(2)“g.” f. Basis.The individual’s or entity’s basis in the pass-through entity assets is adjusted by the full amount of the section 179 deduction passed through in the year that the section 179 deduction is received and is therefore the same for both Iowa and federal purposes. g. Later tax years.For tax years beginning on or after January 1, 2020, Iowa fully conforms to the federal section 179 deduction and special Iowa treatment for excess section 179 deductions received from pass-throughs is not available. This rule is intended to implement Iowa Code section 422.7 as amended by 2018 Iowa Acts, Senate File 2417.

ITEM 2. Rescind rule 701—53.23(422) and adopt the following new rule in lieu thereof:

701—53.23(422) Section 179 expensing. 53.23(1) In general. Iowa taxpayers that elect to expense certain depreciable business assets in the year the assets were placed in service under section 179 of the Internal Revenue Code must also expense those same assets for Iowa income tax purposes in that year. However, for certain years, the Iowa limitations on this deduction are different from the federal limitations for the same year. This means that for some tax years, adjustments are required to determine the correct Iowa section 179 expensing deduction, as described in this rule. 53.23(2) Claiming the deduction. a. Timing and requirement to follow federal election.A taxpayer that takes a federal section 179 deduction must also take the deduction for the same asset in the same year for Iowa purposes, except as expressly provided by Iowa law or this rule. A taxpayer that takes a federal section 179 deduction is not permitted to opt out of taking the same deduction for Iowa purposes. A taxpayer that does not take a federal section 179 deduction on a specific qualifying asset is not permitted to take a section 179 deduction for Iowa purposes on that asset. b. Qualifying for the deduction.Whether a specific business asset qualifies for a section 179 deduction is determined by the Internal Revenue Code (Title 26, U.S. Code) and applicable federal regulations for both federal and Iowa purposes. c. Amount of the Iowa deduction.Generally, the Iowa deduction must equal the amount of the federal deduction taken for the same asset in the same year, subject to special Iowa limitations. The following chart provides a comparison of the Iowa and federal section 179 dollar limitations and reduction limitations. For tax years beginning on or after January 1, 2018, and before January 1, 2019, the Iowa limitations applicable to corporations and other entities subject to the corporate income tax and to financial institutions subject to the franchise tax are not the same as the limitations applicable to individuals and other entities; see rule 701—40.65(422) for the section 179 limitations imposed on individuals and other noncorporate entities, and see rule 701—59.24(422) for the section 179 limitations subject to financial institutions subject to the franchise tax.Section 179 Deduction Allowances Under Federal and Iowa LawFederalIowa Tax YearDollar LimitationReduction LimitationDollar Limitation Reduction Limitation2003$ 100,000$ 400,000$ 100,000$ 400,0002004102,000410,000102,000410,0002005105,000420,000105,000420,0002006108,000430,000108,000430,0002007125,000500,000125,000500,0002008250,000800,000250,000800,0002009250,000800,000133,000530,0002010500,0002,000,000500,0002,000,0002011500,0002,000,000500,0002,000,0002012500,0002,000,000500,0002,000,0002013500,0002,000,000500,0002,000,0002014500,0002,000,000500,0002,000,0002015500,0002,000,000500,0002,000,0002016500,0002,010,00025,000200,0002017510,0002,030,00025,000200,00020181,000,0002,500,00025,000* 200,0002019Indexed amount unknown as of 8/2/18Indexed amount unknown as of 8/2/18100,000400,0002020 and laterIowa limitations are the same as federal* The Iowa limitations for 2018 are applicable to corporations, entities subject to the corporate income tax, and financial institutions subject to the franchise tax. For Iowa limitations applicable to individuals, trusts and estates, and pass-through entities which are not corporations, see rule 701—40.65(422). d. Reduction.Both the federal and the Iowa deductions for section 179 assets are reduced (phased out dollar for dollar) for taxpayers whose total section 179 assets placed in service during a given year cost more than the amount specified (reduction limitation) for that year. Like the deduction limitation, the Iowa and federal reduction limitations are different for certain years. See paragraph 53.23(2)“c” for applicable limitations. e. Amounts in excess of the Iowa limits. (1) Recovering the excess. Due to the differences between the Iowa and federal limitations for certain years, taxpayers may have a federal section 179 deduction that exceeds the amount allowed for Iowa purposes. This excess amount is handled in different ways depending on the source of the deduction. 1. Assets placed in service by the taxpayer or entity reporting the deduction. The cost of any section 179 assets placed in service by the taxpayer in excess of the Iowa limitation for a given year may be recovered through regular depreciation under Section 168 of the Internal Revenue Code, without regard to bonus depreciation under Section 168(k). The Iowa section 179 and depreciation deductions and any basis adjustments resulting from the difference in timing of the recovery between Iowa and federal law are calculated and tracked on forms made available on the department’s website. 2. Special election for assets placed in service by a pass-through entity when the section 179 deduction is claimed by an owner of that pass-through. See subrule 53.23(3) for information on a special election available to certain owners of pass-through entities related to any section 179 deductions passed through from a partnership or other entity that, in the aggregate, exceed the Iowa limitations. (2) Special information for pass-throughs. In the case of pass-through entities, section 179 limitations apply at both the entity level and the owner level. Pass-through entities that are required to file an Iowa return and that actually place section 179 assets in service should follow 53.23(2)“e”(1)“1” to account for any assets for which the total federal section 179 deductions for a given year exceeded the Iowa limitation. Owners of pass-throughs receiving section 179 deductions from one or more pass-throughs that, in the aggregate, exceed the Iowa limitations should follow 53.23(2)“e”(1)“2.” f. Income limitation.The Iowa section 179 deduction for any given year is limited to the taxpayer’s income from active conduct in a trade or business in the same manner that the section 179 deduction is limited for federal purposes. If an allowable Iowa section 179 deduction exceeds the taxpayer’s business income for a given year, any excess allowable Iowa section 179 deduction may be carried forward as described in paragraph 53.23(2)“g.” g. Carryforward.This paragraph applies only to amounts that do not exceed the Iowa section 179 deduction limitations for a given year but do exceed the taxpayer’s business income for that year. As with the federal deduction, allowable Iowa section 179 deductions claimed in a given year that exceed a taxpayer’s business income may be carried forward and claimed in future years. This carryforward, if any, is calculated using only amounts up to the Iowa limit. Any federal section 179 deduction the taxpayer claimed in excess of the Iowa limit is not an Iowa section 179 deduction and therefore is not eligible for the carryforward described in this paragraph. Such amounts must instead be recovered as described in paragraph 53.23(2)“e,” or in subrule 53.23(3) for taxpayers receiving the deduction from one or more pass-through entities and making the special election as described in that subrule. h. Difference in basis.Iowa adjustments for differences between the Iowa and federal section 179 deduction limitations may cause the taxpayer to have a different basis in the same asset for Iowa and federal purposes. Taxpayers are required to use forms made available on the department’s website to calculate and track these differences. 53.23(3) Section 179 deduction received from a pass-through entity. In some cases, an entity that receives income from one or more pass-through entities may receive a section 179 deduction in excess of the Iowa deduction limitation listed in paragraph 53.23(2)“c” for a given year. The entity may be eligible for a special election with regard to that excess section 179 deduction, as described in this subrule. a. Tax years beginning before January 1, 2019.For tax years beginning before January 1, 2019, the amount of any section 179 deduction received by a corporation or an entity subject to the corporate income tax in excess of the Iowa deduction limitation for that year is not eligible for the special election. b. Special election available for tax year 2019.For tax years beginning on or after January 1, 2019, but before January 1, 2020, a corporation or an entity subject to the corporate income tax that receives a section 179 deduction from one or more pass-through entities in excess of the Iowa deduction limitation for that tax year may elect to deduct the excess in future years, as described in this subrule. See rule 701—40.65(422) for special rules applicable to individuals and other noncorporate entities, and see rule 701—59.24(422) for special rules applicable to financial institutions subject to the franchise tax. (1) This special election applies only to section 179 deductions passed through to the corporation or entity subject to the corporate income tax by one or more other entities. (2) If the total Iowa section 179 deduction passed through to the corporation or entity subject to the corporate income tax exceeds the federal section 179 deduction limitation for that year, the corporation or other entity may only use the amount up to the federal limitation when calculating the deduction under this election. Any amount in excess of the federal limitation shall not be deducted for Iowa purposes. c. Section 179 assets of a corporation or entity subject to the corporate income tax.A corporation or entity subject to the corporate income tax that makes this special election may not claim an Iowa section 179 deduction for any assets the corporation or entity placed in service during the same year but must instead depreciate such assets using the modified accelerated cost recovery system (MACRS) without regard to bonus depreciation under Section 168(k) of the Internal Revenue Code. To the extent the corporation or entity claimed a federal section 179 deduction on those assets, the Iowa depreciation deductions and any basis adjustments resulting from the difference in timing of the recovery between Iowa law and federal law are calculated and tracked on forms made available on the department’s website. d. Calculating the special election.A corporation or other entity subject to the corporate income tax that elects to take advantage of the special election must first add together all section 179 deductions which the corporation or other entity received from all relevant pass-through entities. The corporation or other entity must claim an aggregate Iowa section 179 deduction equal to the Iowa limit for the tax year. This amount must be subtracted from the total. Whatever remains is the amount the corporation or other entity will be permitted to deduct (special election deduction) in future years. e. Special election deduction. (1) Calculation. The remaining amount from paragraph 53.23(3)“d” must be separated into five equal shares. (2) Claiming the special election deduction. The corporation or other entity may deduct one of the five shares in each of the next five years. The dollar limitations and reduction limitations on section 179 deductions do not apply to special deduction amounts allowed over the five-year period under this paragraph. (3) Excess special deduction. The special election deduction for a given year is limited to the taxpayer’s business income for that year. Any excess may be carried forward to future years. Any amounts carried forward under this subparagraph shall be added to, and treated in the same manner as, regular Iowa section 179 deduction carryforwards as described in paragraph 53.23(2)“g.” f. Basis.The individual’s or entity’s basis in the pass-through entity assets is adjusted by the full amount of the section 179 deduction passed through in the year that the section 179 deduction is received and is therefore the same for both Iowa and federal purposes. g. Later tax years.For tax years beginning on or after January 1, 2020, Iowa fully conforms to the federal section 179 deduction and special Iowa treatment for excess section 179 deductions received from pass-throughs is not available. This rule is intended to implement Iowa Code section 422.35 as amended by 2018 Iowa Acts, Senate File 2417.

ITEM 3. Rescind rule 701—59.24(422) and adopt the following new rule in lieu thereof:

701—59.24(422) Section 179 expensing. 59.24(1) In general. Iowa taxpayers that elect to expense certain depreciable business assets in the year the assets were placed in service under Section 179 of the Internal Revenue Code must also expense those same assets for Iowa income tax purposes in that year. However, for certain years, the Iowa limitations on this deduction are different from the federal limitations for the same year. This means that for some tax years, adjustments are required to determine the correct Iowa section 179 expensing deduction, as described in this rule. 59.24(2) Claiming the deduction. a. Timing and requirement to follow federal election.A taxpayer that takes a federal section 179 deduction must also take the deduction for the same asset in the same year for Iowa purposes, except as expressly provided by Iowa law or this rule. A taxpayer that takes a federal section 179 deduction is not permitted to opt out of taking the same deduction for Iowa purposes. A taxpayer that does not take a federal section 179 deduction on a specific qualifying asset is not permitted to take a section 179 deduction for Iowa purposes on that asset. b. Qualifying for the deduction.Whether a specific business asset qualifies for a section 179 deduction is determined by the Internal Revenue Code (Title 26, U.S. Code) and applicable federal regulations for both federal and Iowa purposes. c. Amount of the Iowa deduction.Generally, the Iowa deduction must equal the amount of the federal deduction taken for the same asset in the same year, subject to special Iowa limitations. The following chart provides a comparison of the Iowa and federal section 179 dollar limitations and reduction limitations. For tax years beginning on or after January 1, 2018, and before January 1, 2019, the Iowa limitations applicable to financial institutions subject to the franchise tax and to corporations and other entities subject to the corporate income tax are not the same as the limitations applicable to individuals and other entities; see rule 701—40.65(422) for the section 179 limitations imposed on individuals and other noncorporate entities, and see rule 701—53.23(422) for the section 179 limitations imposed on corporations and other entities subject to the corporate income tax.Section 179 Deduction Allowances Under Federal and Iowa LawFederalIowa Tax YearDollar LimitationReduction LimitationDollar Limitation Reduction Limitation2003$ 100,000$ 400,000$ 100,000$ 400,0002004102,000410,000102,000410,0002005105,000420,000105,000420,0002006108,000430,000108,000430,0002007125,000500,000125,000500,0002008250,000800,000250,000800,0002009250,000800,000133,000530,0002010500,0002,000,000500,0002,000,0002011500,0002,000,000500,0002,000,0002012500,0002,000,000500,0002,000,0002013500,0002,000,000500,0002,000,0002014500,0002,000,000500,0002,000,0002015500,0002,000,000500,0002,000,0002016500,0002,010,00025,000200,0002017510,0002,030,00025,000200,00020181,000,0002,500,00025,000* 200,0002019Indexed amount unknown as of 8/2/18Indexed amount unknown as of 8/2/18100,000400,0002020 and laterIowa limitations are the same as federal* These Iowa limitations for 2018 are applicable to financial institutions subject to the franchise tax, corporations, and entities subject to the corporate income tax. For Iowa limitations applicable to individuals, trusts and estates, and pass-through entities which are not financial institutions or corporations, see rule 701—40.65(422). d. Reduction.Both the federal and the Iowa deductions for section 179 assets are reduced (phased out dollar for dollar) for taxpayers whose total section 179 assets placed in service during a given year cost more than the amount specified (reduction limitation) for that year. Like the deduction limitation, the Iowa and federal reduction limitations are different for certain years. See paragraph 59.24(2)“c” for applicable limitations. e. Amounts in excess of the Iowa limits. (1) Recovering the excess. Due to the differences between the Iowa and federal limitations for certain years, taxpayers may have a federal section 179 deduction that exceeds the amount allowed for Iowa purposes. This excess amount is handled in different ways depending on the source of the deduction. 1. Assets placed in service by the taxpayer or entity reporting the deduction. The cost of any section 179 assets placed in service by the taxpayer in excess of the Iowa limitation for a given year may be recovered through regular depreciation under Section 168 of the Internal Revenue Code, without regard to bonus depreciation under Section 168(k). The Iowa section 179 and depreciation deductions and any basis adjustments resulting from the difference in timing of the recovery between Iowa and federal law are calculated and tracked on forms made available on the department’s website. 2. Special election for assets placed in service by a pass-through entity when the section 179 deduction is claimed by an owner of that pass-through. See subrule 59.24(3) for information on a special election available to certain owners of pass-through entities related to any section 179 deductions passed through from a partnership or other entity that, in the aggregate, exceed the Iowa limitations. (2) Special information for pass-throughs. In the case of pass-through entities, section 179 limitations apply at both the entity level and the owner level. Pass-through entities that are required to file an Iowa return and that actually place section 179 assets in service should follow 59.24(2)“e”(1)“1” to account for any assets for which the total federal section 179 deductions for a given year exceeded the Iowa limitation. Owners of pass-throughs receiving section 179 deductions from one or more pass-throughs that, in the aggregate, exceed the Iowa limitations should follow 59.24(2)“e”(1)“2.” f. Income limitation.The Iowa section 179 deduction for any given year is limited to the taxpayer’s income from active conduct in a trade or business in the same manner that the section 179 deduction is limited for federal purposes. If an allowable Iowa section 179 deduction exceeds the taxpayer’s business income for a given year, any excess allowable Iowa section 179 deduction may be carried forward as described in paragraph 59.24(2)“g.” g. Carryforward.This paragraph applies only to amounts that do not exceed the Iowa section 179 deduction limitations for a given year but do exceed the taxpayer’s business income for that year. As with the federal deduction, allowable Iowa section 179 deductions claimed in a given year that exceed a taxpayer’s business income may be carried forward and claimed in future years. This carryforward, if any, is calculated using only amounts up to the Iowa limit. Any federal section 179 deduction the taxpayer claimed in excess of the Iowa limit is not an Iowa section 179 deduction and therefore is not eligible for the carryforward described in this paragraph. Such amounts must instead be recovered as described in paragraph 59.24(2)“e,” or in subrule 59.24(3) for taxpayers receiving the deduction from one or more pass-through entities and making the special election as described in that subrule. h. Difference in basis.Iowa adjustments for differences between the Iowa and federal section 179 deduction limitations may cause the taxpayer to have a different basis in the same asset for Iowa and federal purposes. Taxpayers are required to use forms made available on the department’s website to calculate and track these differences. 59.24(3) Section 179 deduction received from a pass-through entity. In some cases, a financial institution that receives income from one or more pass-through entities may receive a section 179 deduction in excess of the Iowa deduction limitation listed in paragraph 59.24(2)“c” for a given year. The financial institution may be eligible for a special election with regard to that excess section 179 deduction, as described in this subrule. a. Tax years beginning before January 1, 2019.For tax years beginning before January 1, 2019, the amount of any section 179 deduction received by a financial institution subject to the franchise tax in excess of the Iowa deduction limitation for that year is not eligible for the special election. b. Special election available for tax year 2019.For tax years beginning on or after January 1, 2019, but before January 1, 2020, a financial institution subject to the franchise tax that receives a section 179 deduction from one or more pass-through entities in excess of the Iowa deduction limitation for that tax year may elect to deduct the excess in future years, as described in this subrule. See rule 701—40.65(422) for special rules applicable to individuals and other noncorporate entities, and see rule 701—53.23(422) for special rules applicable to corporations and other entities subject to the corporate income tax. (1) This special election applies only to section 179 deductions passed through to the financial institution by one or more other entities. (2) If the total Iowa section 179 deduction passed through to the financial institution exceeds the federal section 179 deduction limitation for that year, the financial institution may only use the amount up to the federal limitation when calculating the deduction under this election. Any amount in excess of the federal limitation shall not be deducted for Iowa purposes. c. Section 179 assets of a financial institution.A financial institution that makes this special election may not claim an Iowa section 179 deduction for any assets the financial institution placed in service during the same year but must instead depreciate such assets using the modified accelerated cost recovery system (MACRS) without regard to bonus depreciation under Section 168(k) of the Internal Revenue Code. To the extent the financial institution claimed a federal section 179 deduction on those assets, the Iowa depreciation deductions and any basis adjustments resulting from the difference in timing of the recovery between Iowa law and federal law are calculated and tracked on forms made available on the department’s website. d. Calculating the special election.A financial institution that elects to take advantage of the special election must first add together all section 179 deductions which the financial institution received from all relevant pass-through entities. The financial institution must claim an aggregate Iowa section 179 deduction equal to the Iowa limit for the tax year. This amount must be subtracted from the total. Whatever remains is the amount the financial institution will be permitted to deduct (special election deduction) in future years. e. Special election deduction. (1) Calculation. This remaining amount from paragraph 59.24(3)“d” must be separated into five equal shares. (2) Claiming the special election deduction. The financial institution may deduct one of the five shares in each of the next five years. The dollar limitations and reduction limitations on section 179 deductions do not apply to special deduction amounts allowed over the five-year period under this paragraph. (3) Excess special deduction. The special election deduction for a given year is limited to the taxpayer’s business income for that year. Any excess may be carried forward to future years. Any amounts carried forward under this subparagraph shall be added to, and treated in the same manner as, regular Iowa section 179 deduction carryforwards as described in paragraph 59.24(2)“g.” f. Basis.The financial institution’s basis in the pass-through entity assets is adjusted by the full amount of the section 179 deduction passed through in the year that the section 179 deduction is received and is therefore the same for both Iowa and federal purposes. g. Later tax years.For tax years beginning on or after January 1, 2020, Iowa fully conforms to the federal section 179 deduction and special Iowa treatment for excess section 179 deductions received from pass-throughs is not available. This rule is intended to implement Iowa Code section 422.35 as amended by 2018 Iowa Acts, Senate File 2417.ARC 4025CRevenue Department[701]Notice of Intended Action

Proposing rule making related to research activities credit for individual and corporate income tax and providing an opportunity for public comment

The Revenue Department hereby proposes to amend Chapter 42, “Adjustments to Computed Tax and Tax Credits,” and Chapter 52, “Filing Returns, Payment of Tax, Penalty and Interest, and Tax Credits,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 421.17.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 15.335, 422.10 and 422.33 as amended by 2018 Iowa Acts, Senate File 2417.Purpose and Summary This proposed rule making amends the Department’s rules relating to the research activities credit (RAC) for both individual and corporate income tax. 2018 Iowa Acts, Senate File 2417, amends the corresponding Iowa Code sections. This rule making reflects those legislative changes and also removes unnecessary or outdated language from the rules. The Department sought input from a variety of stakeholders and incorporated several suggestions into these amendments and will continue to look for ways to incorporate feedback submitted either in writing or during the public hearing.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. The statutory change underlying this rule making was estimated in the Legislative Services Agency’s Fiscal Note for 2018 Iowa Acts, Senate File 2417, to increase General Fund revenues by $4.5 million in FY 2019, $7.2 million in FY 2020, $7.5 million in FY 2021, $7.8 million in FY 2022, $8.1 million in FY 2023, and $8.4 million in FY 2024. 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). 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 17, 2018. Comments should be directed to: Tim Reilly Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306 Phone: 515.725.2294 Email: tim.reilly@iowa.govPublic Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: October 17, 2018 10 to 11 a.m. Auditorium Wallace 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 Department and advise of specific needs. 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 701—42.11(15,422) as follows:

701—42.11(15,422) Research activities credit. Effective for tax years beginning on or after January 1, 1985, taxpayers are allowed a credit equal to 6½ percent of the state’s apportioned share of qualified expenditures for increasing research activities. Effective for tax years beginning on or after January 1, 1991, the Iowa research activities credit will be computed on the basis of the qualifying expenditures for increasing research activities as allowable under Section 41 of the Internal Revenue Code in effect on January 1, 1999. The state’s apportioned share of the qualifying expenditures for increasing research activities is a percent equal to the ratio of qualified research expenditures in Iowa to the total qualified research expenditures. The Iowa research activities credit is made permanent for tax years beginning on or after January 1, 1991, even though there may no longer be a research activities credit for federal income tax purposes.The taxes imposed on individual income shall be reduced by a state tax credit for increasing research activities in this state. For individual income tax, the requirements of the research activities credit are described in Iowa Code section 422.10. This rule explains terms not defined in the statute and procedures for claiming the credit. 42.11(1) Qualified expenditures in Iowa are: a. Wages for qualified research services performed in Iowa. b. Cost of supplies used in conducting qualified research in Iowa. c. Rental or lease cost of personal property used in Iowa in conducting qualified research. Where personal property is used both within and without Iowa in conducting qualified research, the rental or lease cost must be prorated between Iowa and non-Iowa use by the ratio of days used in Iowa to total days used both within and without Iowa. d. Sixty-five percent of contract expenses paid by a corporation to a qualified organization for basic research performed in Iowa. 42.11(2) Total qualified expenditures are: a. Wages paid for qualified research services performed everywhere. b. Cost of supplies used in conducting qualified research everywhere. c. Rental or lease cost of personal property used in conducting qualified research everywhere. d. Sixty-five percent of contract expenses paid by a corporation to a qualified organization for basic research performed everywhere.“Qualifying expenditures for increasing research activities” is the smallest of the amount by which the qualified research expenses for the taxable year exceed the base period research expenses or 50 percent of the qualified research expenses for the taxable year.A taxpayer may claim on the taxpayer’s individual income tax return the pro rata share of the credit for qualifying research expenditures incurred in Iowa by a partnership, subchapter S corporation, or estate or trust. The portion of the credit claimed by the individual must be in the same ratio as the individual’s pro rata share of the earnings of the partnership, subchapter S corporation, or estate or trust.Any research credit in excess of the individual’s tax liability, less the nonrefundable credits authorized in Iowa Code chapter 422, division II, may be refunded to the taxpayer or may be credited to the estimated tax of the taxpayer for the following year. 42.11(1) Definitions. "Accountant" means a person authorized under Iowa Code chapter 542 to engage in the practice of public accounting in Iowa as defined in Iowa Code section 542.3(23) or authorized to engage in such practice in another state under a similar law of another state. "Architect" means a person licensed under Iowa Code chapter 544A or a similar law of another state. "Aviation and aerospace" means the design, development or production of aircraft, rockets, missiles, spacecraft and other machinery and equipment that operate in aerospace. "Collection agency" means a person primarily engaged in the business of collecting debt, including but not limited to consumer debt collection subject to the provisions of the federal Fair Debt Collections Practices Act in 15 U.S.C. §1692 et seq., the Iowa debt collection practices Act in Iowa Code sections 537.7101 through 537.7103, or other similar state law. "Finance or investment company" means a person primarily engaged in finance or investment activities broadly consisting of the holding, depositing, or management of a customer’s money or assets for investment purposes, or the provision of loans or other similar financing or credit to customers. “Finance or investment company” includes but is not limited to a person organized or licensed under Iowa Code chapter 524, 533, or 533D or other similar state or federal law, or an investment company as defined in 15 U.S.C. §80a-3. "Life sciences" means the sciences concerned with the study of living organisms, including agriscience, biology, botany, zoology, microbiology, physiology, biochemistry, and related subjects. "Manufacturing" means the same as defined in 2018 Iowa Acts, Senate File 2417, section 182. "Publisher" means a person whose primary business is the publishing of books, periodicals, newspapers, music, or other works for sale in any format. "Real estate company" means a person licensed under Iowa Code chapter 543B or otherwise primarily engaged in acts constituting dealing in real estate as described in Iowa Code section 543B.6. "Retailer" means a person that primarily engages in sales of personal property as defined in 2018 Iowa Acts, Senate File 2417, section 158, or services directly to an ultimate consumer. A business that primarily makes sales for resale is not a retailer. "Software engineering" means the detailed study of the design, development, operation, and maintenance of software. "Transportation company" means a person whose primary business is the transportation of persons or property from one place to another. "Wholesaler" means a person that primarily engages in buying large quantities of goods and reselling them in smaller quantities to retailers or other merchants who in turn sell those goods to the ultimate consumer. 42.11(2) Requirement that the business claim and be allowed the federal credit. To claim this credit, a taxpayer’s business must claim and be allowed a research credit for such qualified research expenses under Section 41 of the Internal Revenue Code for the same taxable year as the taxpayer’s business is claiming the credit. a. Being “allowed” the federal credit.For purposes of this subrule, a federal credit is “allowed” if the taxpayer meets all requirements to claim the credit under Section 41 of the Internal Revenue Code and any applicable federal regulation and Internal Revenue Service guidance and such credit has not been disallowed by the Internal Revenue Service. b. Applicability of requirement to pass-throughs.If the individual received the Iowa credit through a pass-through entity, the pass-through entity that conducted the research must have claimed and been allowed the federal credit in order for the individual to claim the Iowa credit. c. Impact of federal audit.If the Internal Revenue Service audits or otherwise reviews the return and disallows the credit, the taxpayer shall file an amended Iowa return along with supporting schedules, including an amended federal return or a copy of the federal revenue agent’s report and notification of final federal adjustments, to add back the Iowa credit to the extent not previously disallowed by the department. d. Authority of the department.Nothing in this subrule shall limit the department’s authority to review, examine, audit, or otherwise challenge an Iowa tax credit claim under Iowa Code section 422.10, regardless of inaction, a settlement, or a determination by the Internal Revenue Service under Section 41 of the Internal Revenue Code. 42.11(3) Research activities credit for tax years beginning in 2000. Effective for tax years beginning on or after January 1, 2000, the taxes imposed for individual income tax purposes will be reduced by a tax credit for increasing research activities in this state. a. The credit equals the sum of the following: (1) Six and one-half percent of the excess of qualified research expenses during the tax year over the base amount for the tax year based upon the state’s apportioned share of the qualifying expenditures for increasing research activities. (2) Six and one-half percent of the basic research payments determined under Section 41(e)(1)(A) of the Internal Revenue Code during the tax year based upon the state’s apportioned share of the qualifying expenditures for increasing research activities. The state’s apportioned share of the qualifying expenditures for increasing research activities is a percent equal to the ratio of qualified research expenditures in this state to total qualified research activities. b. In lieu of the credit computed under paragraph 42.11(3)“a,” a taxpayer may elect to compute the credit amount for qualified research expenses incurred in this state in a manner consistent with the alternative incremental credit described in Section 41(c)(4) of the Internal Revenue Code for tax years beginning on or after January 1, 2000, but beginning before January 1, 2010. The taxpayer may make this election regardless of the method used by the taxpayer on the taxpayer’s federal income tax return. The election made under this paragraph is for the tax year, and the taxpayer may use another method or this same method for any subsequent tax year. For purposes of this alternative incremental research credit computation, the credit percentages applicable to qualified research expenses described in clauses (i), (ii), and (iii) of Section 41(c)(4)(A) of the Internal Revenue Code are 1.65 percent, 2.20 percent, and 2.75 percent, respectively. c. In lieu of the credit computed under paragraph 42.11(3)“a,” a taxpayer may elect to compute the credit amount for qualified research expenses incurred in this state in a manner consistent with the alternative simplified credit described in Section 41(c)(5) of the Internal Revenue Code for tax years beginning on or after January 1, 2010. The taxpayer may make this election regardless of the method used by the taxpayer on the taxpayer’s federal income tax return. The election made under this paragraph is for the tax year, and the taxpayer may use another method or this same method for any subsequent tax year.For purposes of this alternative simplified research credit computation, the credit percentages applicable to qualified research expenses described in Section 41(c)(5)(A) and clause (ii) of Section 41(c)(5)(B) of the Internal Revenue Code are 4.55 percent and 1.95 percent, respectively. d. For purposes of this subrule, the terms “base amount,” “basic research payment,” and “qualified research expense” mean the same as defined for the federal credit for increasing research activities under Section 41 of the Internal Revenue Code, except that, for purposes of the alternative incremental credit described in paragraph 42.11(3)“b” and the alternative simplified credit described in paragraph 42.11(3)“c,” such amounts are limited to research activities conducted within this state. For purposes of this subrule, “Internal Revenue Code” means the Internal Revenue Code in effect on January 1, 2014. e. An individual may claim a research activities credit incurred by a partnership, S corporation, limited liability company, estate, or trust electing to have the income of the business entity taxed to the individual. The amount claimed by an individual from the business entity shall be based upon the pro rata share of the individual’s earnings from a partnership, S corporation, estate or trust. Any research credit in excess of the individual’s tax liability, less the nonrefundable credits authorized in Iowa Code chapter 422, division II, may be refunded to the individual or may be credited to the individual’s tax liability for the following tax year. f. An eligible business approved under the new jobs and income program prior to July 1, 2005, is eligible for an additional research activities credit as described in 701—subrule 52.7(4). An eligible business approved under the enterprise zone program is eligible for an additional research activities credit as described in 701—subrules 52.7(5) and 52.7(6). g. Tax years ending on or after July 1, 2005, but before July 1, 2009. For eligible businesses approved under the enterprise zone program and the high quality job creation program, research activities allowable for the Iowa research activities credit include expenses related to the development and deployment of innovative renewable energy generation components manufactured or assembled in Iowa. These expenses are not eligible for the federal credit for increasing research activities. These innovative renewable energy generation components do not include components with more than 200 megawatts in installed effective nameplate capacity. The research activities credit related to renewable energy generation components under the enterprise zone program and the high quality job creation program shall not exceed $1 million in the aggregate.These expenses are available only for the additional research activities credit set forth in subrule 42.11(3), paragraph “f,” for businesses in enterprise zones and the additional research activities credit set forth in subrule 42.29(1) for businesses approved under the high quality job creation program. These expenses are not available for the research activities credit set forth in subrule 42.11(3), paragraphs “a,” “b” and “c.” h. Tax years ending on or after July 1, 2009. For eligible businesses approved under the enterprise zone program prior to July 1, 2014, research activities allowable for the Iowa research activities credit include expenses related to the development and deployment of innovative renewable energy generation components manufactured or assembled in Iowa; such expenses related to the development and deployment of innovative renewable energy generation components are not eligible for the federal credit for increasing research activities. The enterprise zone program was repealed on July 1, 2014. However, any research activities credit earned by businesses approved under the enterprise zone program prior to July 1, 2014, remains valid and can be claimed on tax returns filed after July 1, 2014. (1) For purposes of this paragraph, innovative renewable energy generation components do not include components with more than 200 megawatts in installed effective nameplate capacity. (2) The research activities credit related to renewable energy generation components under the enterprise zone program and the high quality jobs program described in subrule 42.42(1) shall not exceed $2 million for the fiscal year ending June 30, 2010, and $1 million for the fiscal year ending June 30, 2011. (3) These expenses related to the development and deployment of innovative renewable energy generation components are applicable only to the additional research activities credit set forth in subrule 42.11(3), paragraph “f,” for businesses in enterprise zones and the additional research activities credit set forth in subrule 42.42(1) for businesses approved under the high quality jobs program, and are not applicable to the research activities credit set forth in subrule 42.11(3), paragraphs “a,” “b” and “c.” 42.11(4) Reporting of research activities credit claims. Beginning with research activities credit claims filed on or after July 1, 2009, the department shall issue an annual report to the general assembly of all research activities credit claims in excess of $500,000. The report, which is due by February 15 of each year, will contain the name of each claimant and the amount of the research activities credit for all claims filed during the previous calendar year in excess of $500,000. 42.11(3) Calculating the credit. For information on how the credit is calculated, see Iowa Code section 422.10. 42.11(4) Claiming the tax credit. a. Forms.The credit must be claimed on the forms provided on the department’s website and must include all information required by the forms. b. Allocation to the individual owners of an entity or beneficiaries of an estate or trust.An individual may claim a research activities credit incurred by a partnership, S corporation, limited liability company, estate, or trust electing to have the income of the business entity taxed to the individual. The amount claimed by an individual from the business entity shall be based upon the pro rata share of the individual’s earnings from a partnership, S corporation, estate or trust. c. Refundability.Any research credit in excess of the individual’s tax liability, less the nonrefundable credits authorized in Iowa Code chapter 422, division II, may be refunded to the individual or may be credited to the individual’s tax liability for the following tax year. d. Transferability.Tax credit certificates shall not be transferred to any other person. e. Enterprise zone claimants.The enterprise zone program was repealed on July 1, 2014. However, any supplemental research activities credit earned by businesses pursuant to Iowa Code section 15.335 and approved under the enterprise zone program prior to July 1, 2014, remains valid and can be claimed on tax returns filed after July 1, 2014. This rule is intended to implement Iowa Code sections 15.335 and 422.10 as amended by 2014 Iowa Acts, House File 24352018 Iowa Acts, Senate File 2417.

ITEM 2. Amend rule 701—52.7(422) as follows:

701—52.7(422) Research activities credit. Effective for tax years beginning on or after January 1, 1985, taxpayers are allowed a tax credit equal to 6.5 percent of the state’s apportioned share of qualifying expenditures for increasing research activities. For purposes of this credit, “qualifying expenditures” means the qualifying expenditures for increasing research activities as defined for purposes of the federal credit for increasing research activities computed under Section 41 of the Internal Revenue Code. For tax years beginning on or after January 1, 1991, “qualifying expenditures” means the qualifying expenditures for increasing research activities as defined for purposes of the federal credit for increasing research activities computed under Section 41 of the Internal Revenue Code as in effect on January 1, 1998. The Iowa research activities credit is made permanent for tax years beginning on or after January 1, 1991, even though there may no longer be a research activities credit for federal income tax purposes. The “state’s apportioned share of qualifying expenditures for increasing research activities” must be the ratio of the qualified expenditures in Iowa to total qualified expenditures times total qualifying expenditures for increasing research activities.The taxes imposed on corporate income shall be reduced by a state tax credit for increasing research activities in this state. For corporate income tax, the requirements of the research activities credit are described in Iowa Code section 422.33. This rule explains terms not defined in the statute and procedures for claiming the credit. 52.7(1) Qualified expenditures in Iowa are: a. Wages for qualified research services performed in Iowa. b. Cost of supplies used in conducting qualified research in Iowa. c. Rental or lease cost of personal property used in Iowa in conducting qualified research. Where personal property is used both within and without Iowa in conducting qualified research, the rental or lease cost must be prorated between Iowa and non-Iowa use by the ratio of days used in Iowa to total days used both within and without Iowa. d. Sixty-five percent of contract expenses paid by a corporation to a qualified organization for basic research performed in Iowa. 52.7(2) Total qualified expenditures are: a. Wages paid for qualified research services performed everywhere. b. Cost of supplies used in conducting qualified research everywhere. c. Rental or lease cost of personal property used in conducting qualified research everywhere. d. Sixty-five percent of contract expenses paid by a corporation to a qualified organization for basic research performed everywhere.Qualifying expenditures for increasing research activities is the smallest of the amount by which the qualified research expenses for the taxable year exceed the base period research expenses or 50 percent of the qualified research expenses for the taxable year.A shareholder in an S corporation may claim the pro rata share of the Iowa credit for increasing research expenditures on the shareholder’s individual income tax return. The S corporation must provide each shareholder with a schedule showing the computation of the corporation’s Iowa credit for increasing research expenditures and the shareholder’s pro rata share. The shareholder’s pro rata share of the Iowa credit for increasing research activities must be in the same ratio as the shareholder’s pro rata share in the earnings of the S corporation.Any research credit in excess of the corporation’s tax liability less the credits authorized in Iowa Code sections 422.33, 422.91 and 422.111 may be refunded to the taxpayer or credited to the estimated tax of the taxpayer for the following year. 52.7(3) Research activities credit for tax years beginning in 2000. Effective for tax years beginning on or after January 1, 2000, the taxes imposed for corporate income tax purposes will be reduced by a tax credit for increasing research activities. a. The credit equals the sum of the following: (1) Six and one-half percent of the excess of qualified research expenses during the tax year over the base amount for the tax year based upon the state’s apportioned share of the qualifying expenditures for increasing research activities. (2) Six and one-half percent of the basic research payments determined under Section 41(e)(1)(A) of the Internal Revenue Code during the tax year based upon the state’s apportioned share of the qualifying expenditures for increasing research activities.The state’s apportioned share of the qualifying expenditures for increasing research activities is a percent equal to the ratio of qualified research expenditures in this state to total qualified research expenditures. b. In lieu of the credit computed under paragraph 52.7(3)“a,” a taxpayer may elect to compute the credit amount for qualified research expenses incurred in this state in a manner consistent with the alternative incremental credit described in Section 41(c)(4) of the Internal Revenue Code for tax years beginning on or after January 1, 2000, but beginning before January 1, 2010. The taxpayer may make this election regardless of the method used by the taxpayer on the taxpayer’s federal income tax return. The election made under this paragraph is for the tax year and the taxpayer may use another method or this same method for any subsequent tax year.For purposes of this alternative incremental research credit computation, the credit percentages applicable to qualified research expenses described in clauses (i), (ii), and (iii) of Section 41(c)(4)(A) of the Internal Revenue Code are 1.65 percent, 2.20 percent, and 2.75 percent, respectively. c. In lieu of the credit computed under paragraph 52.7(3)“a,” a taxpayer may elect to compute the credit amount for qualified research expenses incurred in this state in a manner consistent with the alternative simplified credit described in Section 41(c)(5) of the Internal Revenue Code for tax years beginning on or after January 1, 2010. The taxpayer may make this election regardless of the method used by the taxpayer on the taxpayer’s federal income tax return. The election made under this paragraph is for the tax year, and the taxpayer may use another method or this same method for any subsequent tax year.For purposes of this alternative simplified research credit computation, the credit percentages applicable to qualified research expenses described in Section 41(c)(5)(A) and clause (ii) of Section 41(c)(5)(B) of the Internal Revenue Code are 4.55 percent and 1.95 percent, respectively. d. For purposes of this subrule, the terms “base amount,” “basic research payment,” and “qualified research expense” mean the same as defined for the federal credit for increasing research activities under Section 41 of the Internal Revenue Code, except that, for purposes of the alternative incremental credit described in paragraph 52.7(3)“b” and the alternative simplified credit described in paragraph 52.7(3)“c,” such amounts are limited to research activities conducted within this state. For purposes of this subrule, “Internal Revenue Code” means the Internal Revenue Code in effect on January 1, 2014. e. A shareholder in an S corporation may claim the pro rata share of the Iowa credit for increasing research activities on the shareholder’s individual return. The S corporation must provide each shareholder with a schedule showing the computation of the corporation’s Iowa credit for increasing research activities and the shareholder’s pro rata share. The shareholder’s pro rata share of the Iowa credit for increasing research activities must be in the same ratio as the shareholder’s pro rata share in the earnings of the S corporation.Any research credit in excess of the corporation’s tax liability less the credits authorized in Iowa Code sections 422.33, 422.91 and 422.111 may be refunded to the taxpayer or credited to the estimated tax of the corporation for the following year. 52.7(1) Definitions. "Accountant" means a person authorized under Iowa Code chapter 542 to engage in the practice of public accounting in Iowa as defined in Iowa Code section 542.3(23) or authorized to engage in such practice in another state under a similar law of another state. "Architect" means a person licensed under Iowa Code chapter 544A or a similar law of another state. "Aviation and aerospace" means the design, development or production of aircraft, rockets, missiles, spacecraft and other machinery and equipment that operate in aerospace. "Collection agency" means a person primarily engaged in the business of collecting debt, including but not limited to consumer debt collection subject to the provisions of the federal Fair Debt Collections Practices Act in 15 U.S.C. §1692 et seq., the Iowa debt collection practices Act in Iowa Code sections 537.7101 through 537.7103, or other similar state law. "Finance or investment company" means a person primarily engaged in finance or investment activities broadly consisting of the holding, depositing, or management of a customer’s money or assets for investment purposes, or the provision of loans or other similar financing or credit to customers. “Finance or investment company” includes but is not limited to a person organized or licensed under Iowa Code chapter 524, 533, or 533D or other similar state or federal law, or an investment company as defined in 15 U.S.C. §80a-3. "Life sciences" means the sciences concerned with the study of living organisms, including agriscience, biology, botany, zoology, microbiology, physiology, biochemistry, and related subjects. "Manufacturing" means the same as defined in 2018 Iowa Acts, Senate File 2417, section 182. "Publisher" means a person whose primary business is the publishing of books, periodicals, newspapers, music, or other works for sale in any format. "Real estate company" means a person licensed under Iowa Code chapter 543B or otherwise primarily engaged in acts constituting dealing in real estate as described in Iowa Code section 543B.6. "Retailer" means a person that primarily engages in sales of personal property as defined in 2018 Iowa Acts, Senate File 2417, section 158, or services directly to an ultimate consumer. A business that primarily makes sales for resale is not a retailer. "Software engineering" means the detailed study of the design, development, operation, and maintenance of software. "Transportation company" means a person whose primary business is the transportation of persons or property from one place to another. "Wholesaler" means a person that primarily engages in buying large quantities of goods and reselling them in smaller quantities to retailers or other merchants who in turn sell those goods to the ultimate consumer. 52.7(2) Requirement that the business claim and be allowed the federal credit. To claim this credit, a taxpayer’s business must claim and be allowed a research credit for such qualified research expenses under Section 41 of the Internal Revenue Code for the same taxable year as the taxpayer’s business is claiming the credit. a. Being “allowed” the federal credit.For purposes of this subrule, a federal credit is “allowed” if the taxpayer meets all requirements to claim the credit under Section 41 of the Internal Revenue Code and any applicable federal regulation and Internal Revenue Service guidance and such credit has not been disallowed by the Internal Revenue Service. b. Applicability of requirement to pass-throughs.If the individual received the Iowa credit through a pass-through entity, the pass-through entity that conducted the research must have claimed and been allowed the federal credit in order for the individual to claim the Iowa credit. c. Impact of federal audit.If the Internal Revenue Service audits or otherwise reviews the return and disallows the credit, the taxpayer shall file an amended Iowa return along with supporting schedules, including an amended federal return or a copy of the federal revenue agent’s report and notification of final federal adjustments, to add back the Iowa credit to the extent not previously disallowed by the department. d. Authority of the department.Nothing in this subrule shall limit the department’s authority to review, examine, audit, or otherwise challenge an Iowa tax credit claim under Iowa Code section 422.33, regardless of inaction, a settlement, or a determination by the Internal Revenue Service under Section 41 of the Internal Revenue Code. 52.7(3) Calculating the credit. For information on how the credit is calculated, see Iowa Code section 422.33. 52.7(4) Research activities credit for an eligible business.Claiming the tax credit. Effective for tax years beginning on or after January 1, 2000, an eligible business may claim a tax credit for increasing research activities in this state during the period the eligible business is participating in the new jobs and income program with the Iowa department of economic development. An eligible business must meet all the conditions listed under Iowa Code section 15.329, which include requirements to make an investment of $10 million as indexed for inflation and the creation of a minimum of 50 full-time positions. The research credit authorized in this subrule is in addition to the research activities credit described in 701—subrule 42.11(3) or the research credit described in subrule 52.7(3). a. The additional research activities credit for an eligible business is computed under the criteria for computing the research activities credit under 701—subrule 42.11(3) or under subrule 52.7(3), depending on which of those subrules the initial research credit was computed. The same qualified research expenses and basic research expenses apply in computation of the research credit for an eligible business as were applicable in computing the credit in 701—subrule 42.11(3) or 52.7(3). In addition, if the alternative incremental credit method was used to compute the initial research credit under 701—subrule 42.11(3) or 52.7(3), that method would be used to compute the research credit for an eligible business. Therefore, if a taxpayer that met the qualifications of an eligible business had a research activities credit of $200,000 as computed under subrule 52.7(3), the research activities credit for the eligible business would result in an additional credit for the taxpayer of $200,000. a. Forms.The credit must be claimed on the forms provided on the department’s website and must include all information required by the forms. b. Allocation to the individual owners of an entity or beneficiaries of an estate or trust.If the eligible business is a partnership, S corporation, limited liability company, estate or trust where the income from the eligible business is taxed to the individual owners of the business, these individual owners may claim the additional research activities credit allowed to the eligible business. The research credit is allocated to each of the individual owners of the eligible business on the basis of the pro rata share of that individual’s earnings from the eligible business. c. Refundability.Any research credit in excess of the corporation’s tax liability for the taxable year may be refunded to the taxpayer or credited to the corporation’s tax liability for the following year. d. Transferability.Tax credit certificates shall not be transferred to any other person. e. Enterprise zone claimants.The enterprise zone program was repealed on July 1, 2014. Any supplemental research activities credit earned by businesses pursuant to Iowa Code section 15.335 and approved under the enterprise zone program prior to July 1, 2014, remains valid and can be claimed on tax returns filed after July 1, 2014. 52.7(5) Corporate tax research credit for increasing research activities within an enterprise zone. Effective for tax years beginning on or after January 1, 2000, for awards made by the Iowa department of economic development prior to July 1, 2010, the taxes imposed for corporate income tax purposes will be reduced by a tax credit for increasing research activities within an area designated as an enterprise zone. This credit for increasing research activities is in lieu of the research activities credit described in 701—subrule 42.11(3) or the research activities credit described in subrule 52.7(3). For the amount of the credit for increasing research activities within an enterprise zone for awards made by the economic development authority on or after July 1, 2010, see subrule 52.7(6). a. The credit equals the sum of the following: (1) Thirteen percent of the excess of qualified research expenses during the tax year over the base amount for the tax year based upon the state’s apportioned share of the qualifying expenditures for research activities. (2) Thirteen percent of the basic research payments determined under Section 41(e)(1)(A) of the Internal Revenue Code during the tax year based upon the state’s apportioned share of the qualifying expenditures for increasing research activities. The state’s apportioned share of the qualifying expenditures for increasing research activities is a percent equal to the ratio of qualified research expenditures in the enterprise zone to total qualified research expenditures. b. In lieu of the credit computed under paragraph 52.7(5)“a,” a taxpayer may elect to compute the credit amount for qualified research expenses incurred in the enterprise zone in a manner consistent with the alternative incremental credit described in Section 41(c)(4) of the Internal Revenue Code for tax years beginning prior to January 1, 2010. The taxpayer may make this election regardless of the method used by the taxpayer on the taxpayer’s federal income tax return. The election made under this paragraph is for the tax year and the taxpayer may use another method or this same method for any subsequent tax year. For purposes of this alternative research credit computation, the credit percentages applicable to qualified research expenses described in clauses (i), (ii), and (iii) of Section 41(c)(4)(A) of the Internal Revenue Code are 3.30 percent, 4.40 percent, and 5.50 percent, respectively. c. In lieu of the credit computed under paragraph 52.7(5)“a,” a taxpayer may elect to compute the credit amount for qualified research expenses incurred in the enterprise zone in a manner consistent with the alternative simplified credit described in Section 41(c)(5) of the Internal Revenue Code for tax years beginning on or after January 1, 2010. The taxpayer may make this election regardless of the method used by the taxpayer on the taxpayer’s federal income tax return. The election made under this paragraph is for the tax year and the taxpayer may use another method or this same method for any subsequent tax year. For purposes of this alternative research credit computation, the credit percentages applicable to qualified research expenses described in Section 41(c)(5)(A) and clause (ii) of Section 41(c)(5)(B) are 9.10 percent and 3.90 percent, respectively. d. For purposes of this subrule, the terms “base amount,” “basic research payment,” and “qualified research expense” mean the same as defined for the federal credit for increasing research activities under Section 41 of the Internal Revenue Code, except that, for purposes of the alternative incremental credit described in paragraph 52.7(3)“b” and the alternative simplified credit described in paragraph 52.7(3)“c” of this rule, such amounts are limited to research activities conducted within the enterprise zone. For purposes of this rule, “Internal Revenue Code” means the Internal Revenue Code in effect on January 1, 2014. e. Any research credit in excess of the corporation’s tax liability for the taxable year may be refunded to the taxpayer or credited to the corporation’s tax liability for the following year. 52.7(6) Research activities credit for awards made by the economic development authority on or after July 1, 2010, but before July 1, 2014. For eligible businesses approved under the enterprise zone program prior to July 1, 2014, by the economic development authority when an award is made on or after July 1, 2010, but before July 1, 2014, the taxes imposed for corporate income tax purposes will be reduced by a tax credit for increasing research activities within an area designated as an enterprise zone. The enterprise zone program was repealed on July 1, 2014. Any research activities credit earned by businesses approved under the enterprise zone program prior to July 1, 2014, remains valid and can be claimed on tax returns filed after July 1, 2014. This credit for increasing research activities is in lieu of the research activities credit described in 701—subrule 42.11(3) or the research activities credit described in subrule 52.7(3). The amount of the credit depends upon the gross revenues of the eligible business. a. The credit equals the sum of the following for eligible businesses with gross revenues of less than $20 million. (1) Sixteen and one-half percent of the excess of qualified research expenses during the tax year over the base amount for the tax year based upon the state’s apportioned share of the qualifying expenditures for research activities. (2) Sixteen and one-half percent of the basic research payments determined under Section 41(e)(1)(A) of the Internal Revenue Code during the tax year based upon the state’s apportioned share of the qualifying expenditures for increasing research activities. The state’s apportioned share of the qualifying expenditures for increasing research activities is a percentage equal to the ratio of qualified research expenditures in the enterprise zone to total qualified research expenditures. b. The credit equals the sum of the following for eligible businesses with gross revenues of $20 million or more. (1) Nine and one-half percent of the excess of qualified research expenses during the tax year over the base amount for the tax year based upon the state’s apportioned share of the qualifying expenditures for research activities. (2) Nine and one-half percent of the basic research payments determined under Section 41(e)(1)(A) of the Internal Revenue Code during the tax year based upon the state’s apportioned share of the qualifying expenditures for increasing research activities. The state’s apportioned share of the qualifying expenditures for increasing research activities is a percentage equal to the ratio of qualified research expenditures in the enterprise zone to total qualified research expenditures. c. In lieu of the credit computed under paragraphs 52.7(6)“a” and “b,” a taxpayer may elect to compute the credit amount for qualified research expenses incurred in the enterprise zone in a manner consistent with the alternative simplified credit described in Section 41(c)(5) of the Internal Revenue Code. The taxpayer may make this election regardless of the method used by the taxpayer on the taxpayer’s federal income tax return. The election made under this paragraph is for the tax year and the taxpayer may use another method or this same method for any subsequent tax year. For purposes of this alternative research credit computation, the credit percentages applicable to qualified research expenses described in Section 41(c)(5)(A) and clause (ii) of Section 41(c)(5)(B) of the Internal Revenue Code depend upon the gross revenues of the eligible business. (1) The percentages are 7 percent and 3 percent, respectively, for eligible businesses with gross revenues of less than $20 million. (2) The percentages are 2.1 percent and 0.9 percent, respectively, for eligible businesses with gross revenues of $20 million or more. d. For purposes of this subrule, the terms “base amount,” “basic research payment,” and “qualified research expense” mean the same as defined for the federal credit for increasing research activities under Section 41 of the Internal Revenue Code, except that, for purposes of the alternative simplified credit described in paragraph 52.7(3)“c” of this rule, such amounts are limited to research activities conducted within the enterprise zone. For purposes of this rule, “Internal Revenue Code” means the Internal Revenue Code in effect on January 1, 2014. e. Any research credit in excess of the corporation’s tax liability for the taxable year may be refunded to the taxpayer or credited to the corporation’s tax liability for the following year. 52.7(7) Reporting of research activities credit claims. Beginning with research activities credit claims filed on or after July 1, 2009, the department shall issue an annual report to the general assembly of all research activities credit claims in excess of $500,000. The report, which is due by February 15 of each year, will contain the name of each claimant and the amount of the research activities credit for all claims filed during the previous calendar year in excess of $500,000. This rule is intended to implement Iowa Code sections 15.335 and 422.33 as amended by 2014 Iowa Acts, House File 24352018 Iowa Acts, Senate File 2417.ARC 4024CRevenue Department[701]Notice of Intended Action

Proposing rule making related to state-imposed and locally imposed hotel and motel taxes and providing an opportunity for public comment

The Revenue Department hereby proposes to amend Chapter 103, “State-Imposed and Locally Imposed Hotel and Motel Taxes—Administration,” rescind Chapter 104, “Hotel and Motel—Filing Returns, Payment of Tax, Penalty, and Interest,” and Chapter 105, “Locally Imposed Hotel and Motel Tax,” and amend Chapter 241, “Excise Taxes Not Governed by the Streamline Sales and Use Tax Agreement,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed 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 423A as amended by 2018 Iowa Acts, Senate File 2417.Purpose and Summary Item 1 proposes to consolidate the hotel and motel tax rules into a single chapter and implement changes to the tax made by division XIII of 2018 Iowa Acts, Senate File 2417. Items 2 and 3 propose to eliminate Chapters 104 and 105, respectively, the content of which has been incorporated into Chapter 103. Item 4 proposes to rescind duplicative rules on the hotel and motel tax found in Chapter 241 (rules 701—241.3(423A) to 701—241.5(423A)).Fiscal Impact This rule making has no fiscal impact beyond the impact estimated by the Legislative Services Agency for 2018 Iowa Acts, Senate File 2417. 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). 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 17, 2018. Comments should be directed to: Joe Fraioli Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306 Phone: 515.725.4057 Email: joe.fraioli@iowa.govPublic Hearing If requested, a public hearing at which persons may present their views orally or in writing will be held as follows: October 17, 2018 11 a.m. to 12 noon Auditorium Wallace 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 Department and advise of specific needs. The Department reserves the right to cancel the hearing if no timely requests for a public hearing are received.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 701—Chapter 103 as follows: CHAPTER 103STATE-IMPOSED AND LOCALLY IMPOSED HOTEL AND MOTEL TAXES—ADMINISTRATION[Prior to 12/17/86, Revenue Department[730]]

701—103.1(423A) Definitions, administration, and imposition. 103.1(1) Incorporation of definitions. Definitions. For the purposes of this chapter and 701—Chapters 104 and 105, unless the context otherwise requires:To the extent it is consistent with Iowa Code chapter 423A and this chapter, all other words and phrases used in this chapter shall mean the same as defined in Iowa Code section 423.1 and rule 701—211.1(423). 103.1(2) Chapter-specific definitions. For purposes of this chapter, unless the context otherwise requires: "Department" means the department of revenue. "Director" means the director of the department of revenue. "Land use district" means a district created under Iowa Code chapter 303, subchapter IV. "Lessor" means any person engaged in the business of renting lodging to users. “Lessor” is synonymous with the word “retailer.” "Locally imposed tax" means the hotel and motel tax levied by Iowa Code section 423A.4. "Lodging" means rooms, apartments, or sleeping quarters in a hotel, motel, inn, public lodging house, rooming house, or manufactured or mobile home which is tangible personal property, or in a tourist court, or in any place where sleeping accommodations are furnished to transient guests for rent, whether with or without meals. "Person" means the same as the term is defined in rule 701—211.1(423). "Renting" "rent" means a transfer of possession or control of lodging for a fixed or indeterminate term for consideration and includes any kind of direct or indirect charge for such lodging or its use. "Retailer" means a person required to collect hotel and motel tax, including but not limited to lodging providers, lodging facilitators, and lodging platforms. "Sales price" means the amount of consideration for renting of lodging and means the same as the term is defined in rule 701—211.1(423). "State-imposed tax" means the hotel and motel tax levied by Iowa Code section 423A.3. "Tax" "hotel and motel tax" means either the state-imposed or locally imposed hotel and motel tax levied by Iowa Code sectionssection 423A.3 andany locally imposed hotel and motel tax levied by Iowa Code section 423A.4, respectively. "User" means a person to whom lodging is rented.All other words and phrases used in this chapter and 701—Chapters 104 and 105 and defined in rule 701—211.1(423) have the meaning set forth in that rule for the purposes of these chapters. 103.1(2) Administration. The department is charged with the administration of the tax, subject to the rules, regulations, and direction of the director. The department is required to administer the tax as nearly as possible in conjunction with the administration of the state sales tax except that portion of the law which implements the streamlined sales and use tax agreement. Therefore, the term “retailer” will be used interchangeably between the two taxes. 103.1(3) Imposition. A state-imposed tax of 5 percent is imposed upon the sales price for the rental of any lodging if the rental occurs in this state. The state-imposed tax shall be collected by any lessor of lodging from the user of that lodging. The lessor shall add the tax to the sales price of the lodging, and the state-imposed tax, when collected, shall be stated as a distinct item, separate and apart from the sales price of the lodging and the local tax imposed, if any, under Iowa Code section 423A.4. 103.1(4) A city, county, or land use district may impose a tax on lodging, at a rate not to exceed 7 percent, which shall be imposed in increments of one or more full percentage points upon the sales price from the renting of lodging. See 701—Chapter 105 for more information on locally imposed hotel and motel tax. This rule is intended to implement Iowa Code sections423A.2, 423A.3, and 423A.4.

701—103.2(423A) Statute of limitations, supplemental assessments and refund adjustments. Within three years after a return is filed, the department shall examine it, determine the tax due, and give notice of assessment to the taxpayer. If no return has been filed, the department may determine the tax due and give notice thereof. If such determination is based upon an examination of books, papers, records, or memoranda, such an examination will not include any transactions completed three years or more prior to such examination.Whenever books and records are examined by an employee designated by the director, whether to verify a return or claim for refund or in making an audit, an assessment must be issued within one year from the date of the completion of the examination. If not, the period for which the books and records were examined becomes closed and no assessment can be made. In no case is the one-year period of limitation an extension of or in addition to the three-year period of limitation.The department may, at any time within the period prescribed for assessment or refund adjustment, make a supplemental assessment or refund adjustment whenever it is ascertained that any assessment or refund adjustment is imperfect or incomplete in any respect.If an assessment or refund adjustment is appealed (protested under rule 701—7.8(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in such appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation. This rule is intended to implement Iowa Code sections 423.37 and 422.70 and 2005 Iowa Code Supplement sections 423A.3 and 423A.4.

701—103.3 701—103.2(423A) Credentials and receiptsAdministration. Employees of the department have official credentials, and the retailer should require proof of the identity of persons claiming to represent the department. No charges shall be made or gratuities of any kind accepted by an employee of the department for assistance given in or out of the office of the department.All employees authorized to collect money are supplied with official receipt forms. When cash is paid to an employee, the retailer should require the employee to issue an official receipt. Such receipt shall show the retailer’s name, address and permit number; the purpose for the payment; and the amount of the payment. The retailer should retain all receipts, and only official receipts for payment will be recognized by the department. 103.2(1) Generally. The department is charged with the administration of the tax, subject to the rules, regulations, and direction of the director. The department is required to administer the tax as nearly as possible in conjunction with the administration of the state sales tax except that portion of the law which implements the streamlined sales and use tax agreement. 103.2(2) Incorporation of 701—Chapter 11. Except as otherwise stated in this chapter, the requirements of 701—Chapter 11 shall apply to retailers required to collect hotel and motel tax in the same manner that those requirements apply to all sellers and retailers making sales subject to state sales tax. This rule is intended to implement Iowa Code sections 422.68(1) and 422.70 and 2005 Iowa Code Supplement sections 423A.3 and 423A.4section 423A.6.

701—103.4 701—103.3(423A) Retailers required to keep recordsTax imposition and exemptions. 103.4(1) 103.3(1) Tax imposed. Every retailer shall keep and preserve the following records:A state-imposed tax of 5 percent is imposed upon the sales price for the rental of any lodging if the lodging is located in this state. A locally imposed tax of up to 7 percent is imposed to the extent permitted by Iowa Code section 423A.4. a. A daily record of the amount of all cash and time payments and credit sales from the renting of rooms subject to tax under Iowa Code chapter 423A. b. A record of all deductions and exemptions taken in filing a tax return. 103.4(2) 103.3(2) Exemptions. The records required in this rule must be preserved for a period of three years and open for examination by the department during this period of time.The only exemptions from the hotel and motel tax are those in Iowa Code section 423A.5. The exemptions apply to both the state-imposed tax and the locally imposed tax under Iowa Code chapter 423A. 103.3(3) Retailers performing all or part of their record keeping and retention of books, records, and other sources of information under electronic data interchange process or technology, see 701—subrule 11.4(4). 103.3(4) If a tax liability has been assessed and an appeal is pending to the department, district court or an appellate court, books, papers, records, memoranda or documents specified in this rule that relate to the period covered by the assessment shall be preserved until the final disposition of the appeal. This provision applies equally to parties to the appeal and other retailers who could claim a refund as a result of the resolution of the appeal. 103.3(5) Failure to keep and preserve adequate records shall be grounds for revocation of the state-imposed tax permit. This rule is intended to implement Iowa Code section 423.41 and 2005 Iowa Code Supplement sections 423A.3,and 423A.4, and 423A.5.

701—103.5 701—103.4(423A) Audit of recordsFiling returns; payment of tax; penalty and interest. The department shall have the right and duty to examine or cause to be examined the books, papers, records, memoranda or documents of a taxpayer for the purposes of verifying the correctness of a return filed or estimating the tax liability of any retailer. The right to examine records includes the right to examine copies of the retailer’s state and federal income tax returns. When a retailer fails or refuses to produce the records for examination when requested by the department, the director shall have authority to require, by a subpoena, the attendance of the retailer and any other witness whom the department deems necessary or expedient to examine and compel the retailer and witness to produce books, papers, records, memoranda or documents relating in any manner to the tax.The department shall have the obligation to inform the retailer when an examination of the retailer’s books, papers, records, memoranda or documents has been completed and the amount of tax liability, if any, due upon completion of the audit. Tax liability includes the amount of tax, interest, penalty and fees which may be due. 103.4(1) Incorporation of 701—Chapter 12. Except as otherwise stated in this chapter, the requirements of 701—Chapter 12 shall apply to retailers required to collect hotel and motel tax in the same manner that those requirements apply to all sellers and retailers making sales subject to state sales tax. 103.4(2) Quarterly returns only. Retailers required to collect hotel and motel tax must file returns on a quarterly basis; retailers may not file annual returns. 103.4(3) Combined sales/hotel and motel tax return. a. On the quarterly sales tax return, a retailer shall report the gross sales subject to the hotel and motel tax for the entire quarter, listing allowable deductions and calculating tax for the entire quarter. The information required for the computation of the hotel and motel tax liability shall be separate from that required for the computation of the retail sales tax liability and must be stated and computed separately even though total tax liability may be paid with a single remittance. b. The quarterly returns are due on the last day of the month following the end of the calendar quarter during which the tax is collected. If a person is required to collect the hotel and motel tax and file a monthly deposit for retail sales tax purposes, the monthly deposit should not include the hotel and motel tax collected during the period covered by the deposit. 103.4(4) Application of partial payments. a. All payments received with the return will be applied to satisfy state sales tax and hotel and motel tax liabilities, which include penalty and interest. b. Application of partial payments received with the tax return and any subsequent partial payment received for that tax period will be applied based on a ratio formula, unless properly designated by the taxpayer as provided in Iowa Code section 421.60(2)“d.” The denominator in the ratio shall be the total of the hotel and motel tax due and the state sales tax due less any monthly sales tax deposits. The numerators in the ratio formula shall be the amounts of hotel and motel tax due and the net state sales tax due. 600_______×500=$300Hotel and motel tax1,000400_______×500=$200State sales tax1,000 103.4(5) Application of payments upon termination by a land use district. If a land use district terminates its local hotel and motel tax, lodging within the district becomes subject to any local hotel and motel tax imposed by a city or county within the corporate boundaries of that district on the date of termination. If a city or county imposes a local hotel and motel tax within the district, all revenues received from or moneys refunded to lodging within the district after the date on which the land use district terminates its local hotel and motel tax shall be treated as collected from or refunded to lodging in such city or county. If no city or county imposes a local hotel and motel tax within the district, all revenues received from or moneys refunded to lodging within the district at least 180 days after the date on which the land use district terminates its local hotel and motel tax shall be deposited in or withdrawn from the state general fund as described in Iowa Code section 423A.6(1). This rule is intended to implement Iowa Code sections 422.70 and 423.41 and 2005 Iowa Code Supplement sections 423A.3,and 423A.4, and 423A.6.

701—103.6 701—103.5(423A) BillingsPermits. 103.6(1) 103.5(1) Notice of adjustmentsIncorporation of 701—Chapter 13. Except as otherwise stated in this chapter, the requirements of 701—Chapter 13 shall apply to retailers required to collect hotel and motel tax in the same manner that those requirements apply to all sellers and retailers making sales subject to state sales tax. a. An employee of the department, designated by the director to examine returns or make audits, who discovers discrepancies in returns or learns that a sales price subject to the tax may not have been listed, in whole or in part, or that no return was filed when one was due, is authorized to notify the person of the discovery by ordinary mail. The notice shall not be termed an assessment. It merely informs the person what amount would be due if the information discovered is correct. b. Right of person upon receipt of notice of adjustment. A person who has received notice of an adjustment in connection with a return may pay the additional amount stated to be due. If payment is made, and the person wishes to contest the matter, the person should then file a claim for refund. However, payment will not be required until a certified assessment has been made (although interest will continue to accrue on any amount of tax which is determined to be due if payment is not made). If no payment is made, the person may discuss with the employee who notified the person of the discrepancy, either in person or through correspondence, all matters of fact and law which the person considers relevant to the situation. This person may also ask for a conference with the department. Documents and records supporting the person’s position may be requested. c. Power of employee to compromise tax claim. Only the director has the power to compromise any tax claims. The power of the employee who notified the person of the discrepancy is limited to the determination of the correct amount of tax. 103.6(2) 103.5(2) Notice of assessmentSales tax permit required. If, after following the procedure outlined in paragraph 103.6(1)“b,” no agreement is reached and the person does not pay the amount determined to be correct within 20 days, a notice of the amount of tax due shall be sent to the person responsible for paying the tax. This notice of assessment shall bear the signature of the director and will be sent by mail.If the notice of assessment is timely protested according to the provisions of rule 701—7.8(17A) and Iowa Code section 423.37, proceedings to collect the tax will not be commenced until the protest is ultimately determined, unless the department has reason to believe that a delay caused by such appeal proceedings will result in an irrevocable loss of tax ultimately found to be due and owing the state of Iowa. The department will consider a protest to be timely if filed no later than 60 days following the date of the assessment notice. See rule 701—7.8(17A). a. There is no separate hotel and motel tax permit; retailers required to collect and remit hotel and motel tax shall obtain an Iowa sales tax permit. b. Any person not in the business of renting rooms to transient guests but that facilitates rentals of lodging at varying locations in Iowa to transient guests may register once under this chapter. A lodging facilitator shall not be required to register under this chapter if the lodging facilitator and its affiliates do not exceed the transaction and sales thresholds in 2018 Iowa Acts, Senate File 2417, section 250. This rule is intended to implement Iowa Code sections 422.70, 423.37, and 423.39,and 2005 Iowa Code Supplement sections 423A.3, and 423A.4.

701—103.7 701—103.6(423A) CollectionsSpecial collection and remittance obligations. If determined expedient or advisable to do so, the director may enforce the collection of the tax liability which has been determined to be due. In such action, the attorney general shall appear for the department and have the assistance of the county attorney in the county in which the action is pending.The remedies for the enforcement and collection of the tax are cumulative, and action taken by the department or attorney general shall not be construed to be an election on the part of the state or any of its officers to pursue any remedy to the exclusion of any other remedy. 103.6(1) Obligations of lodging providers. a. Rentals without lodging facilitators or lodging platforms.A lodging provider must collect and remit the hotel and motel tax on the entire sales price of the rental if the transaction does not involve a lodging facilitator or lodging platform. In transactions without lodging facilitators or lodging platforms, only the lodging provider has a hotel and motel tax collection and remittance obligation on the transaction. See example 1C below. b. Rentals involving lodging facilitators.See subrule 103.6(2) for obligations of a lodging provider in rental transactions involving a lodging facilitator. 103.6(2) Obligations of retailers in transactions involving lodging facilitators. Where a user rents lodging through a lodging facilitator, the lodging facilitator shall collect from the user the hotel and motel tax on the entire sales price paid by the user to the lodging facilitator and the lodging provider shall collect from the user the hotel and motel tax on the entire sales price paid by the user to the lodging provider. The remittance obligations of the retailers depend on whether the lodging provider charges the user for facilitating the user’s rental of the lodging. a. Remittance of tax when lodging facilitators do not charge the user a facilitation fee.If the lodging facilitator does not charge the user a facilitation fee, the lodging facilitator shall transmit to the lodging provider the entire hotel and motel tax collected from the user. The lodging provider shall receive the hotel and motel tax transmitted from the lodging facilitator. The lodging provider shall remit that tax, together with any hotel and motel tax collected by the lodging provider directly from the user, to the department. See examples 2D and 2F below. b. Remittance of tax when lodging facilitators charge the user a facilitation fee.If the lodging facilitator charges the user a facilitation fee, the lodging facilitator shall transmit to the lodging provider the portion of the hotel and motel tax that represents the discount room charge incurred from the lodging provider and shall remit to the department the remaining hotel and motel tax, which represents tax on the facilitation fee charged to the user. The lodging provider shall receive the hotel and motel tax transmitted from the lodging facilitator and shall remit that tax, together with any hotel and motel tax collected by the lodging provider directly from the user, to the department. See examples 2C and 2D below. c. Exclusion from the definition of facilitation fee.The commission that a lodging provider pays to a lodging facilitator or lodging platform is not a facilitation fee. d. Examples. 103.6(3) Obligations of lodging platforms. Where a retailer is a lodging platform, the retailer must collect and remit to the department the hotel and motel tax on the entire sales price of the transaction. This rule is intended to implement Iowa Code sections 422.70, 423.37, and 423.39,and 2005 Iowa Code Supplement sections 423A.3, and 423A.4.

701—103.8 701—103.7(423A) No property exempt from distress and saleCertification of funds. The provisions of Iowa Code section 422.26 apply with respect to a tax liability determined to be due by the department. The department shall proceed to collect the tax liability after it has become delinquent; and no property of the taxpayer is exempt from the process whereby the tax is collected. 103.7(1) Certification of funds. Within 45 days after the date that the quarterly returns and payments are due, the director will certify to the treasurer of state the amount of locally imposed tax to be transferred from the general fund to the local transient guest tax fund that is to be distributed to each city, county, and land use district that has adopted the tax. Payments received after the date of certification will remain in the general fund until the next quarterly certification. 103.7(2) Revenues credited to local fund. All locally imposed hotel and motel tax revenues received under Iowa Code chapter 423A are to be credited to the local transient guest tax fund. Revenues include all interest and penalties applicable to any locally imposed hotel and motel tax report or remittance, whether resulting from delinquencies or audits. This rule is intended to implement Iowa Code sections 422.26 and 423.42 and 2005 Iowa Code Supplement sections 423A.3 and 423A.4section 423A.7.

701—103.9(423A) Information confidential. When requested to do so by any person having a legitimate interest in such information, the department shall, after being presented with sufficient proof of the entire situation, disclose to such person the amount of unpaid taxes due by a taxpayer. Such person shall provide the department with sufficient proof consisting of all relevant facts and the reason or reasons for seeking information as to the amount of unpaid taxes due by the taxpayer. The information sought shall not be disclosed if the department determines that the person requesting information does not have a legitimate interest. The director may also authorize the examination of returns filed by a retailer by (1) other officers of the state of Iowa, (2) tax officers of another state if a reciprocal arrangement exists, or (3) tax officers of the federal government if a reciprocal arrangement exists. The director is also empowered to publish annual statistical reports relating to the operation of the tax. See rule 701—6.3(17A).All other information obtained by employees of the department in the performance of their official duties is confidential as provided by law and cannot be disclosed. This rule is intended to implement Iowa Code section 422.72 and 2005 Iowa Code Supplement sections 423A.3 and 423A.4.

701—103.10(423A) Bonding procedure. The director may, when necessary and advisable in order to secure the collection of the tax, require any person subject to the tax to file with the department a bond in an amount which the director may fix, or in lieu of such bond, securities approved by the director in an amount which the director may prescribe.The determination of when and in what amount a bond is required will be determined pursuant to rule 701—11.10(422). The bond required under this rule and rule 701—11.10(422) shall be a single requirement with the amount to be determined with reference to both the potential state-imposed tax (see 701—Chapter 241) and the locally imposed tax liabilities, plus any applicable local option taxes. Whether or not the person required to post the bond files a monthly deposit for state-imposed tax purposes, the basis for determining the locally imposed tax portion of the bond shall be an amount sufficient to cover nine months or three quarters of tax liability. This rule is intended to implement Iowa Code section 423.35 and 2005 Iowa Code Supplement sections 423A.3 and 423A.4.

701—103.11(423A) Sales tax. The hotel and motel tax is levied in addition to the state sales tax imposed in Iowa Code chapter 423. Additionally, the director of revenue is required to administer the hotel and motel tax as nearly as possible in conjunction with the administration of the state sales tax law except that portion of the law which implements the streamlined sales and use tax agreement. See 701—Chapters 12 to 14 for details. The computation of the tax shall be based on the sales price of the room excluding the sales tax. This rule is intended to implement 2005 Iowa Code Supplement sections 423A.3, 423A.4, and 423A.6.

701—103.12(423A) Judicial review. Judicial review of actions of the director may be sought in accordance with the terms of the Iowa administrative procedure Act in a manner similar to that provided for review of sales tax matter. See 701—Chapter 7 for details. This rule is intended to implement Iowa Code section 423.38 and 2005 Iowa Code Supplement sections 423A.3 and 423A.4.

701—103.13(423A) Registration. All persons who are required to collect and remit the locally imposed tax are required to register with the department as a hotel and motel tax collector. This rule is intended to implement 2005 Iowa Code Supplement section 423A.6.

701—103.14(423A) Notification. Before the local option hotel and motel tax of a city, county, or land use district can become effective, be revised, or be repealed, 45 days’ notice of such action must be given to the director in writing by mail. This rule is intended to implement Iowa Code section 423A.4.

701—103.15(423A) Certification of funds. Within 45 days after the date that the quarterly returns and payments are due, the director will certify to the treasurer of state the amount of locally imposed tax to be transferred from the general fund to the local transient guest tax fund, which is to be distributed to each city, county, and land use district that has adopted the tax. Payments received after the date of certification will remain in the general fund until the next quarterly certification. This rule is intended to implement Iowa Code section 423A.7.

ITEM 2. Rescind and reserve 701—Chapter 104.

ITEM 3. Rescind and reserve 701—Chapter 105.

ITEM 4. Rescind and reserve rules 701—241.3(423A) to 701—241.5(423A).ARC 4009CRevenue Department[701]Notice of Intended Action

Proposing rule making related to baseball and softball complex sales tax rebate and providing an opportunity for public comment

The Revenue Department hereby proposes to amend Chapter 235, “Rebate of Iowa Sales Tax Paid,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 421.17.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 423.4 and 2018 Iowa Acts, Senate File 2417.Purpose and Summary This proposed rule making clarifies the process for seeking a rebate of Iowa sales tax that is available to an owner or operator of a baseball and softball complex, in accordance with Iowa Code section 423.4(10).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). 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 16, 2018. Comments should be directed to: Tim Reilly Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306 Phone: 515.725.2294 Email: tim.reilly@iowa.govPublic 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 rule 701—235.2(423) as follows:

701—235.2(423) Sanctioned baseballBaseball and softball tournament facility and movie sitecomplex sales tax rebate. Effective July 1, 2012, qualifying 235.2(1) Generally. a. Rebate approval.The economic development authority and the enhance Iowa board are authorized by the general assembly and the governor to oversee the application and award process for the baseball and softball complex sales tax rebate, created in Iowa Code section 15F.207. An entity whose project is reviewed and recommended by the economic development authority and approved by the enhance Iowa board is entitled to rebate of qualifying sales tax in accordance with Iowa Code section 423.4(10) as amended by 2018 Iowa Acts, Senate File 2417, and this rule, not to exceed the amount awarded by the economic development authority. b. Qualifying rebates.Qualifyingrebates of Iowa state sales tax may be made to the owner or operator of a sanctioned baseball and softball tournament facility and movie sitecomplex as defined in this rule for sales occurring on or after January 1, 2014, and ending January 1, 2024the project completion date for a period of ten years or the date the award was made, whichever is later. Qualifying rebates are for state sales tax only. Local option taxes are not subject to rebate under this program. 235.(1) 235.2(2) Definitions. For the purpose of this program, the definitions in Iowa Code section 423.4(10) as amended by 2018 Iowa Acts, Senate File 2417, apply. In addition, the following definitions apply: "Change of control" means any of the following:

Any change in the ownership of the original or any subsequent legal entity that is the owner or operator of the baseball and softball tournament facility and movie site such that more than 51 percent of the equity interests in the legal entity cease to be owned by individuals who are residents of Iowa, an Iowa corporation, or combination of both.
The original owners of the legal entity that is the owner or operator of the baseball and softball tournament facility and movie site shall collectively cease to own more than 50 percent of the voting equity interests of such legal entity or shall otherwise cease to have effective control of such legal entity.

"Department" means the department of revenue. "Iowa corporation" means a corporation incorporated under the laws of Iowa where at least 51 percent of the corporation’s equity interests are owned by individuals who are residents of Iowa. "Owner or operator" means a for-profit legal entity where at least 51 percent of its equity interests are owned by individuals who are residents of Iowa, an Iowa corporation, or combination of both and that is the owner or operator of a baseball and softball tournament facility and movie site and is primarily a promoter of baseball and softball tournaments. "Population" means the population based upon the 2010 certified federal census. "SanctionedEligible baseball and softball tournament facility and movie sitecomplex" "facilitycomplex" means afacility located in this state that has a project completion date that is after July 1, 2016, is designed and built to host baseball and softball tournament complex and tourist destination, which facility is located on a maximum of 279 acres, located inside or within three miles of the city limits of a city with a population of at least 4,000 but not more than 5,500 residents, which city is located in a county with a population of at least 93,000 but not more than 100,000 residents and where the construction on the baseball and softball tournament facility commenced not later than one year following July 1, 2013, and the cost of the construction upon completion was at least $38 milliongames and has a cost of construction upon completion that is at least $10 million. The boundaries of a “complex” may be a portion or the entirety of a premises. After granting an award to a complex, the enhance Iowa board shall describe in writing to the department the physical boundaries of the complex and provide the department a map illustrating the approved boundaries of the complex. "Placed into service" means the first day a complex is able to host a baseball or softball game. 235.2(2) Affidavit by owner or operator. The owner or operator of a baseball and softball tournament facility and movie site seeking a rebate of sales tax imposed and collected by retailers upon sales of any goods, wares, merchandise, admission tickets, or services furnished to purchasers at the facility must file with the department the following affidavit certifying that qualifications for the rebate have been met: Iowa Department of RevenueSales Tax Rebate AffidavitNAME OF AFFIANTADDRESS OF AFFIANT * * * * AFFIDAVIT FOR SANCTIONED BASEBALL AND SOFTBALL TOURNAMENT FACILITY AND MOVIE SITEThe undersigned duly swears that the named Baseball and Softball Tournament Facility and Movie Site complies with criteria to be entitled to rebate of sales tax as required in Iowa Code section 423.4 as follows:

The facility is sanctioned as a baseball and softball tournament facility and movie site;
The sanctioned baseball and softball tournament facility and movie site is located on a maximum of 279 acres of Iowa land;
The sanctioned baseball and softball tournament facility and movie site is located in a city with a population, as defined by the rules governing this program, of at least 4,000 but not more than 5,500 residents;
The city in which the sanctioned baseball and softball tournament facility and movie site is located is in a county with a population, as defined by the rules governing this program, of at least 93,000 but not more than 100,000 residents;
Construction of the sanctioned baseball and softball tournament facility and movie site was commenced on or before July 1, 2013;
Cost of construction of the sanctioned baseball and softball tournament facility and movie site upon completion is at least $38 million; and
There has not been a “change of control” as defined in the rules governing this program regarding the legal ownership or operation of the baseball and softball tournament facility and movie site.

The undersigned duly swears that he or she is the owner or operator of the sanctioned baseball and softball tournament facility and movie site or that the undersigned is the authorized representative of the sanctioned baseball and softball tournament facility and movie site and has the authority to sign this document. The undersigned swears that he or she has personal knowledge regarding the facts contained in this affidavit and that the statements set forth in this affidavit are true and accurate and that the sanctioned baseball and softball tournament facility and movie site has met all of the requirements as contained herein.________________________________________________________________ ________________Name of Affiant DatePosition of Affiant 235.2(3) Notification to the department of revenue. The owner or operator of the sanctioned baseball and softball tournament facility and movie sitecomplex shall provide the department witha copy of the award notice from the enhance Iowa board. 235.2(4) Retailer identification. a. Identification of retailers.The owner or operator shall provide the department withthe identity of all retailers at the facilitycomplex that will be collecting sales tax, provide sales tax permit numbers for each retailer, and shall keep the information current. b. Notification to department.The owner or operator of the facilitycomplex shall notify the department within ten days of thestart-up or termination of a retailer from collecting sales tax at the facilitycomplex. In addition, the owner or operator of the facility shall notify the department within ten days of the start-up of a retailer collecting sales tax at the facilityFor purposes of this subrule, termination occurs when the retailer provides notice to the owner or operator that the retailer will no longer collect sales tax at the complex or after one calendar year expires since the retailer collected sales tax at the complex. c. Verification by department.The department shall verify the identity of a retailer collecting sales tax at the complex before rebates are paid for sales made by that retailer. 235.2(5) Baseball and softball complex rebate request form and filing requirements. The owner or operator must submit a rebate request to the department on the authorized form. The form will be made available on the department’s website. A properly completed form shall adhere to the following rules: a. Who may file the claim.The claim must be filed by the owner or operator. Claims filed under the name of an affiliated entity will be denied. b. Information regarding retailers making sales at the complex.The following information shall be provided: (1) Business name, (2) Responsible party, (3) Federal employer identification number (FEIN), and (4) Sales tax permit number, which must be associated with an address at the complex. c. Sales at the complex.Information on sales at the complex and sales tax collected on those sales must be reported. Only sales by retailers meeting the requirements of paragraph 235.2(5)“b” and Iowa Code section 423.4(10) as amended by 2018 Iowa Acts, Senate File 2417, are eligible for rebate. d. Additional information.The department may request any other additional information, from any person, necessary to verify the rebate. e. Sworn statement.The department may require a sworn statement regarding the truthfulness and eligibility of the claim. f. Filing frequency.The forms are due quarterly, on or before the last day of the month following the quarter in which the sales at the complex took place. 235.(4) 235.2(6) LimitationsFund transfers. The sanctioned baseball and softball tournament facility and movie site rebate program applies only to transactions that occur on or after January 1, 2014, but before January 1, 2024, and for which sales tax was collected. Only the state sales tax is subject to rebate. The rebate is limited to the Iowa sales tax rate. Local option taxes paid and collected are not subject to rebate. Rebates of sales taxes to a facility are not authorized for transactions that occur on or after the date of the change of control of the facility. The amount of sales tax revenues transferred from the general fund to the baseball and softball tournament facility and movie sitecomplex fund is that portion of sales tax receipts remaining in the general fund after theother department transfers, in the order prescribed:as described in 2018 Iowa Acts, Senate File 2417, section 174. a. Local option sales taxes to those taxing jurisdictions imposing local option taxes; b. If the sales tax rate is increased to greater than 6 percent, an amount of sales tax equal to the amount generated by the increase in the tax rate—limited to 3/8 of 1 percent of the sales tax rate that exceeds 6 percent—to the natural resources and outdoor recreation trust fund; and c. One-sixth of the remaining sales tax revenues to the secure an advanced vision for education fund. 235.(5) 235.2(7) Termination of rebate program. The rebate programterminates 30 days following the date on which $5 million in total rebates has been provided. The rebate award for the sanctioned baseball and softball tournament facility and movie siteeach complex terminates on the earliest of the following dates: a. January 1, 2024Ten years after the project completion date; or b. Thirty days following theThe date on which $16.5 million in total rebatesequal to the amount of the rebate award have been providedto the complex; or c. Thirty days following theThe date of the change of control of the facility. 235.(6) 235.2(8) Sourcing of sales. a. Generally.In general, sales are considered to occur “at the complex” if they occur within the boundaries identified in the physical description provided by the enhance Iowa board and are sourced to a location within those boundaries under Iowa Code section 423.15. b. Advance ticket and admissions sales.Advance ticket and admissions sales shall be considered occurring at the sanctioned baseball and softball tournament facility and movie sitecomplex regardless of where the transactions actually occur. Consequently, the state sales tax and any applicable local option tax in effect for the jurisdiction in which the facility is located must be imposed on the purchase price of advance ticket and admissions sales. Other types of sales eligible for rebate under this program include, but are not limited to, sales by vendors and sales at concessions, gift shops, and museums. 235.2(7) Requirements to obtain a rebate of state sales tax by the sanctioned baseball and softball tournament facility and movie site. a. The rebate request must be submitted to the department on the authorized department form; b. The rebate request form must be filed quarterly with the department and in a timely manner; and c. All the information requested on the rebate request form must be completed. This rule is intended to implement 20112018 Iowa Acts, Senate File 2417, section 174, and Iowa Code Supplement sections 423.2(11) andsection 423.4 as amended by 2012 Iowa Acts, Senate File 23292018 Iowa Acts, Senate File 2417.ARC 4023CRevenue Department[701]Notice of Intended Action

Proposing rule making related to raceway facility sales tax rebate and providing an opportunity for public comment

The Revenue Department hereby proposes to amend Chapter 235, “Rebate of Iowa Sales Tax Paid,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is proposed under the authority provided in Iowa Code section 421.17.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code sections 423.2 and 423.4 as amended by 2018 Iowa Acts, Senate File 2407.Purpose and Summary This rule making proposes new rule 701—235.3(423) relating to rebates of Iowa sales and use tax that are available to an owner or operator of a raceway facility that meets certain criteria set forth in Iowa Code section 423.4(11). The proposed rule describes the process by which a qualifying owner or operator may seek rebates and provides additional information about how sales qualify for the rebate. 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). 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 16, 2018. Comments should be directed to: Tim Reilly Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306 Phone: 515.725.2294 Email: tim.reilly@iowa.govPublic 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 rule 701—235.3(423):

701—235.3(423) Raceway facility sales tax rebate. Qualifying rebates of Iowa state sales and use tax may be made to the owner or operator of a raceway facility that meets the requirements of Iowa Code section 423.4(11) as amended by 2018 Iowa Acts, Senate File 2407. The maximum rebate is limited to project costs incurred and paid on or after May 16, 2018, and before January 1, 2025, or $1.8 million, whichever is less. 235.3(1) Definitions. For purposes of this rebate, unless further defined below, the terms used in this rule mean the same as defined in Iowa Code section 423.4(11) as amended by 2018 Iowa Acts, Senate File 2407. "Incurred date" means the date on which the payment for the project cost was made or the performance of the work that gave rise to the payment occurred, whichever is later. 235.3(2) Retailer identification. a. Identification of retailers.Prior to or in conjunction with the filing of its initial rebate request, the owner or operator shall provide the identity of all retailers at the raceway facility that will be collecting sales tax and provide the department with the sales tax permit number for each retailer. During the period in which rebates may be claimed, the owner or operator shall keep the information current. b. Notification to department.The owner or operator shall notify the department within ten days of the termination or start-up of a retailer collecting sales tax at the raceway facility. For purposes of this subrule, termination occurs when the retailer provides notice to the owner or operator that the retailer will no longer collect sales tax at the raceway facility or after one calendar year expires since the retailer collected sales tax at the raceway facility. c. Verification by department.The department shall verify the identity of a retailer collecting sales tax at the raceway facility before rebates are paid for sales made by that retailer. 235.3(3) Project cost report and rebate form and filing requirements. The owner or operator must submit a project cost report and rebate request to the department on the authorized form. The report and rebate form will be made available on the department’s website. A properly completed rebate form shall contain the following. a. Documentation and information required. (1) Invoices for project costs. (2) An explanation of how each cost meets the definition of “project costs.” (3) The date each cost was incurred and the date each cost was paid. b. Additional information.The department may request any other additional information, from any person, necessary to verify the rebate. c. Sworn statement.The department may require a sworn statement regarding the truthfulness and eligibility of the report. d. Filing frequency.The form and supporting documentation must be provided to the department within 90 days of the date the project cost was paid. Generally, this report is filed quarterly with the rebate request form. However, the project cost report may be filed more frequently if necessary to meet the 90-day filing requirement. Project cost reports and rebate forms will not be accepted on or after the date on which $1.8 million in total rebates has been provided, or June 30, 2025, whichever is earlier. 235.3(4) Raceway facility retailer sales report and filing requirements. The owner or operator must submit a retailer sales report to the department on the authorized form. The form will be made available on the department’s website. A properly completed form shall contain the following. a. Who may file the claim.The claim must be filed by the owner or operator. Claims filed under the name of an affiliated entity will be denied. b. Information regarding retailers making sales at the raceway facility.The following information shall be provided: (1) Business name, (2) Responsible party, (3) Federal employer identification number (FEIN), and (4) Sales tax permit number. c. Sales at the raceway facility.Sales occurring at the raceway facility and sales tax collected on those sales must be reported. Only sales by retailers meeting the requirements of paragraph 235.3(4)“b” and Iowa Code section 423.4(11) as amended by 2018 Iowa Acts, Senate File 2407, are eligible for rebate. Only sales occurring on or after January 1, 2015, and before January 1, 2025, are eligible for the rebate. d. Additional information.The department may request any other additional information, from any person, necessary to verify the rebate. e. Sworn statement.The department may require a sworn statement by the retailer and the owner or operator regarding the truthfulness and eligibility of the claim. f. Filing frequency.The forms are due quarterly, on or before the last day of the month following the quarter in which the sales at the raceway facility took place. 235.3(5) Raceway facility retailer sales report for sales occurring on or after January 1, 2015, and before May 16, 2018. a. Sales report required.A comprehensive raceway facility retailer sales report comprising sales occurring at the raceway facility on or after January 1, 2015, and before May 16, 2018, must be filed by the owner or operator by March 30, 2019. b. Report requirements.The report must include a list of retailers that meet the requirements of subrule 235.3(2), all information described in subrule 235.3(4), and any other information requested by the department to calculate the eligible sales that occurred at the raceway facility during that time period. The report shall be in the same or substantially similar format as the quarterly raceway facility retailer sales report required by subrule 235.3(4). 235.3(6) Sourcing of sales. a. Generally.In general, sales are considered to occur at the raceway facility if they occur within the boundaries of the raceway facility portion of the fairgrounds and are sourced to that raceway facility under Iowa Code section 423.15. b. Advance ticket and admission sales.Advance ticket and admissions sales shall be considered occurring at the raceway facility regardless of where the transactions actually occur. Consequently, the state sales tax and any applicable local option tax in effect for the jurisdiction in which the raceway facility is located must be imposed on the sales price of advance ticket and admissions sales. 235.3(7) Local option sales tax. Local option taxes imposed under Iowa Code chapter 423B are not eligible for rebate under this program. This rule is intended to implement Iowa Code sections 423.2(11) and 423.4(11) as amended by 2018 Iowa Acts, Senate File 2407.ARC 4039CInsurance Division[191]Filed Emergency After Notice

Rule making related to multiple employer welfare arrangements

The Insurance Division hereby rescinds Chapter 77, “Multiple Employer Welfare Arrangements,” Iowa Administrative Code, and adopts a new Chapter 77 with the same title. Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code sections 505.8 and 507A.4 and 2018 Iowa Acts, Senate File 2349.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 507A.4 and 2018 Iowa Acts, Senate File 2349.Purpose and Summary The adoption of new Chapter 77, which supersedes the previous Chapter 77 relating to multiple employer welfare arrangements, serves two purposes. The first purpose of the new chapter is to comply with 2018 Iowa Acts, Senate File 2349, section 2, which requires the Insurance Commissioner to adopt rules to implement the legislation’s provisions. Senate File 2349 provides, among other things, that an entity that wants to act in Iowa as a multiple employer welfare arrangement (MEWA) must, in addition to meeting the other requirements of Iowa Code chapter 507A, meet certain “membership stability” requirements set forth by the Insurance Commissioner by rule. New Chapter 77 is intended to set forth such membership requirements for entities wishing to establish a self-insured MEWA, by ascertaining that there is a firm foundation for the stability of the underlying organization. Such stability is critical to ensure consumer protection. The second purpose intended by the adoption of new Chapter 77 is to implement the observations related to current Chapter 77 made during the Insurance Division’s five-year review of all of the Division’s administrative rules (under agency identification number 191 in the Iowa Administrative Code). That five-year review was conducted pursuant to Iowa Code section 17A.7(2) and was completed in July 2017. Pursuant to those observations, new Chapter 77 reflects changes to the former chapter for purposes of clarification, updating, and consistency with other Iowa Code and Iowa Administrative Code provisions. The changes made to the content of former Chapter 77 for the purpose of implementing 2018 Iowa Acts, Senate File 2349, section 2, are as follows:

New rules 191—77.1(507A) and 191—77.2(507A) are added to set forth the chapter’s purpose and definitions.

A sentence is added in former rule 191—77.1(507A) (subrule 77.3(1) herein) to clarify that the requirements relating to the certificate of registration apply to all plans whether domiciled inside or outside of Iowa.

The content of former rule 191—77.2(507A) (subrule 77.3(2) herein) relating to the application for a certificate of registration is modified as follows: New wording is added to the content of former paragraphs 77.2(1)“c” and “d” (77.3(2)“a”(3) and (4) herein); the language of subparagraph 77.2(1)“g”(2) has been deleted as outdated; the requirement of subparagraph 77.2(1)“g”(3) that an association establishing a MEWA must have been organized and maintained for ten years has been deleted, and new language relating to requirements of the existence of such association for five years is added as paragraph 77.3(5)“b”herein; an additional requirement of the prohibition of insurance producers and benefits consultants from certain involvement with the MEWA is added as 77.3(2)“a”(7)“5” herein; and a new subparagraph which requires biographical affidavits for the members of the MEWA board of directors to be filed as part of the MEWA application process for obtaining a certificate of registration is added as subparagraph 77.3(2)“a”(11) herein.

Filing requirements of subrules 77.2(4) and 77.3(3) are updated in paragraphs 77.3(4)“a” through “c” and “e,” and a new quarterly report requirement is added as paragraph 77.2(3)“d.”

New or updated membership requirements for self-insured MEWAs are added as subrule 77.3(5).

The content of former rule 191—77.4(507A) (subrule 77.3(6) herein) is modified as follows: The time deadline for contract compliance has been removed; a new sentence is added to the required notice to purchasers (in paragraph 77.3(6)“a”); modifications are made to the provisions related to guaranteed issue; and a paragraph pertaining to compliance with state mandates is added to require compliance mainly with Iowa Code chapter 514C, but also with any other state mandates.

Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on July 18, 2018, as ARC 3894C. A public hearing was held on August 8, 2018, at 10:30 a.m. in the Division offices on the fourth floor of Two Ruan Center, 601 Locust Street, Des Moines, Iowa. The Insurance Division received comments through August 8, 2018. The Division received nine comment letters from interested parties regarding the Notice of Intended Action (ARC 3894C). Comments received at the public hearing and comments received other than at the public hearing are described below. For this Adopted and Filed Emergency After Notice rule making, the Division made nonmaterial changes from the Noticed rules, both in response to the comments received and based on the Division’s own review of the Noticed rules, as follows:

In rule 191—77.2(507A), definitions for “employer,” “enrollee” and “member” were deleted and definitions for “association health plan,” “authorized representative,” “employer member” and “insurer” were added. Also in rule 191—77.2(507A), the Division clarified the definition of “participant” to include an AHP.

A few comment letters asked about the extent of the application of the new rules to fully insured MEWAs. The Division addressed this issue by renumbering the Noticed rules related to self-insured MEWAs as subrules, and collected those subrules under one rule (191—77.3(507A), Self-insured multiple employer welfare arrangements). Internal numbering was changed accordingly. The Division also added clarifying language within rule 191—77.3(507A) by inserting the term “self-insured” before “MEWA” when that is the type of MEWA to which the rule is referring. In addition, new rules have been adopted concurrently to these rules and added to Chapter 77 to address the administration by the Division of fully insured MEWAs and of both self-insured and fully insured AHPs (see ARC 4040C and ARC 4041C, IAB 9/26/18). The new rules were adopted emergency on September 6, 2018, and became effective September 12, 2018.

In response to a question about how out-of-state MEWAs would be regulated, the Division added clarification to renumbered subrule 77.3(1) by adding “whether or not the MEWA is domiciled in the state” to indicate that all MEWAs are subject to this rule.

In the catchwords for renumbered subrules 77.3(2) and 77.3(5), the language “for self-insured MEWAs” was deleted because “self-insured MEWAs” is included in catchwords for rule 191—77.3(507A).

In renumbered 77.3(2)“a”(7)“1” and 77.3(4)“c”(4), explanations of what “authorized” means as that word relates to an insurer or a third-party administrator have been added.

In renumbered subparagraph 77.3(2)“a”(8), language was added to clarify that an “authorized” representative may make the required compliance certification. This change makes the description of the person who may make certifications on behalf of the MEWA consistent with that in renumbered subparagraph 77.3(2)“a”(7).

In renumbered subparagraph 77.3(3)“b”(6), the word “company” was replaced with the word “person” to be consistent with the definitions used in the chapter.

In renumbered paragraph 77.3(5)“d,” clarifying language was added to address the question about the application of Iowa Code chapter 513B to MEWA rates.

In renumbered paragraph 77.3(6)“a” and subrule 77.3(7), the requirement for the format of the notices was changed from “ten-point type” to “14-point type or, if electronic, of equivalent prominence,” and in subrule 77.3(7), wording was added to specify that disclosure shall be on the front page of the policy or certificate. Also, in paragraph 77.3(6)“a,” the word “association” in the text of the required notice was changed to “arrangement.”

A clause was added to the end of renumbered paragraph 77.3(6)“e” to clarify how the requirement of the paragraph shall apply.

A new paragraph 77.3(6)“f” was added to define a minimum actuarial value for health benefit plans offered by self-insured MEWAs.

In renumbered subrule 77.3(11), language was added describing the enforcement process that would apply for possible violations of the rules and a change was made to the reference to Iowa Code chapter 507B.

Additional citations were added to the implementation sentence at the end of the chapter to reflect the adoption of additional rules in ARC 4040C.

The Division opted not to make changes related to several comments. The comments and reasoning are described below.

One insurer commented that it would not be able to meet the requirement to provide a copy of the health service contract, which is part of an applicant MEWA’s registration requirements in renumbered subparagraph 77.3(2)“a”(1), until the MEWA itself is certified. The Division believes this is an issue that can be resolved between the MEWA and the insurer during the registration process and does not warrant any changes to the rule.

The Division received a comment regarding the financial solvency requirements contained in renumbered subrule 77.3(3). There were no substantive changes made to these requirements in response to 2018 Iowa Acts, Senate File 2349, section 2. The Division considered all of the comments on this topic but does not feel that changes to subrule 77.3(3) are appropriate and warranted at this time.

Several groups commented on the provision found in renumbered paragraph 77.3(5)“f” which requires that an employer group must participate in a MEWA for five years or be subject to a reasonable fee or assessment charged by the MEWA. While the commenters were in favor of such a provision, they sought clarification on the meaning of the word “reasonable.” The Division believes that the market will dictate what fee can be considered reasonable for the purposes of this penalty.

Several groups commented that they are concerned with the language contained within the required “notice” provision found in renumbered paragraph 77.3(6)“a.” Specifically, there were concerns that the notice contains terminology that may not be familiar to the average consumer. The Division believes that having the “notice” language in bold font appropriately draws the consumer’s attention and that the consumer may reach out to the Division, an insurance producer or an advocate with any questions. Additional language would diminish the importance of the language in bold.

Documents that show both the changes made to former Chapter 77 by the content of new Chapter 77 set forth in the Notice of Intended Action and the differences between the Notice of Intended Action and this Adopted and Filed Emergency After Notice rule making can be found on the Insurance Division website at iid.iowa.gov.Reason for Waiver of Normal Effective Date Pursuant to Iowa Code section 17A.5(2)“b”(1)(a) and (b), the Division finds that the normal effective date of this rule making, 35 days after publication, should be waived and the rule making made effective on September 12, 2018. First, the Commissioner was given authority to adopt emergency rules under 2018 Iowa Acts, Senate File 2349, section 7, which meets the requirement of Iowa Code section 17A.5(2)“b”(1)(a). Second, the rule making confers public benefits, as described further in this paragraph, which meets the requirement of Iowa Code section 17A.5(2)“b”(1)(b). Concurrently with the adoption of these rules, the Division has separately adopted emergency additional new rules to Chapter 77 (ARC 4040C) to do two things: to address the concerns described in the second bulleted paragraph under the heading “Public Comment and Changes to Rule Making” above; and to address the U.S. Department of Labor’s rule, 83 FR 28912 (DOL rule), issued on June 19, 2018, which establishes criteria for the creation and administration of association health plans (AHPs) under the Employment Retirement Income Security Act (ERISA). The DOL rule allows for associations to establish fully insured AHPs beginning September 1, 2018, and is described in greater detail in the preamble to ARC 4040C. The rules adopted in this rule making establish requirements for the administration of self-insured MEWAs. The rules adopted in ARC 4040C provide a framework for the establishment and administration of fully insured MEWAs and of both fully insured AHPs and self-insured AHPs. The rules adopted herein are filed emergency in order to comply with both the requirements of the DOL rule and the authority granted to the Commissioner in 2018 Iowa Acts, Senate File 2349, and to coordinate effectiveness with the requirements of the DOL rule.Adoption of Rule Making This rule making was adopted by Doug Ommen, Iowa Insurance Commissioner, on September 6, 2018.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. Unless unanticipated numbers of MEWA entities apply for certificates of registration, the staff of the Division should be able to handle the work required administering these rules. Waivers The Division’s general waiver provisions of 191—Chapter 4 apply to these rules. 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 became effective on September 12, 2018. The following rule-making action is adopted:

ITEM 1. Rescind 191—Chapter 77 and adopt the following new chapter in lieu thereof: CHAPTER 77MULTIPLE EMPLOYER WELFARE ARRANGEMENTS

191—77.1(507A) Purpose. This chapter is intended to establish rules for the establishment and registration of multiple employer welfare arrangements that intend to offer an employee welfare benefit plan to, and maintain the plan for, any resident of this state.

191—77.2(507A) Definitions. In addition to the definitions set forth in Iowa Code section 507A.3, the following definitions shall apply to this chapter: "Association health plan" "AHP" means a group health plan or an employee welfare benefit plan established by a bona fide group or association of employers. "Authorized representative" means an individual designated by a MEWA or AHP to act for the MEWA or AHP in completion of the duties described in this chapter and may include an officer, director or legal representative. "Beneficiary" means as it is defined in 29 U.S.C. Section 1002(8). "Commissioner" means the Iowa insurance commissioner or, as delegated by the commissioner, the insurance division. "Employee" means as it is defined in 29 U.S.C. Section 1002(6). "Employee welfare benefit plan" means as it is defined in 29 U.S.C. Section 1002(1). "Employer member" means an employer participating in a MEWA or AHP. "Health coverage" means a policy or certificate that provides coverage for medical, dental, optical, surgical, hospital, accident and sickness, prescription, or disability benefits or life insurance. "Insurer" means as it is defined in Iowa Code section 507.1(2)“e.” "MEWA" means a multiple employer welfare arrangement as defined in 29 U.S.C. Section 1002(40). "Participant" means an enrollee or other beneficiary covered under a MEWA or AHP. "Person" means an individual, partnership, joint venture, corporation, mutual company, joint-stock company, trust, estate, unincorporated organization, association, or employee organization, or as “person” is defined in 29 U.S.C. Section 1002(9).

191—77.3(507A) Self-insured multiple employer welfare arrangements. 77.3(1) Certificate of registration. A person shall not establish or maintain a self-insured employee welfare benefit plan that is a self-insured MEWA in this state unless the MEWA obtains and maintains a certificate of registration pursuant to this rule. Such certificate of registration is required for all MEWAs that elect to offer self-insured employee welfare benefit plans to residents of this state whether or not the MEWA is domiciled in the state. 77.3(2) Application for certificate of registration. a. A person wishing to obtain a certificate of registration as a self-insured MEWA pursuant to this chapter shall submit an application and a plan of operation to the commissioner. This application and plan of operation shall include the following: (1) A business plan, including a copy of all health coverage contracts or other instruments which the self-insured MEWA applicant proposes to make with or sell to its employer members or its association’s or group’s members, a copy of its health coverage description and the printed matter to be used in the solicitation of employer members or its association’s or group’s members to purchase the health coverage. (2) Copies of all articles, bylaws, agreements, or other documents or instruments describing the rights and obligations of employers, employees, and beneficiaries with respect to the self-insured MEWA applicant. (3) A current list of all members of the employer group or association sponsoring the self-insured MEWA applicant, a description of the relationship among the employers, a description of how the relationship serves as the basis for the formation of the association or employer group, and a description of how the employer group or association complies with paragraphs 77.3(5)“a” and 77.3(5)“b,” if applicable. (4) A description of the activities of the association or group of employers on behalf of its employer members or its association’s or group’s members other than the sponsorship of the self-insured MEWA applicant, to further demonstrate compliance with paragraph 77.3(5)“a,” if applicable. (5) Current financial statements of the self-insured MEWA applicant that shall include, at a minimum, balance sheets, an income statement, a cash flow statement and a detailed listing of assets. (6) An actuarial opinion which is prepared, signed, and dated by a person who is a member of the American Academy of Actuaries and which states that appropriate loss and loss adjustment reserves have been established, that adequate premiums are being charged, and that the association is operating in accordance with sound actuarial principles and in conformance with this rule. (7) A statement from an authorized representative of the self-insured MEWA applicant that certifies all of the following: 1. The self-insured MEWA applicant shall be administered by an insurer authorized to do the business of insurance in this state or by an authorized third-party administrator that holds a current certificate of registration issued by the commissioner pursuant to Iowa Code section 510.21. 2. The self-insured MEWA applicant is established by a trade, industry, or professional association of employers that has a constitution or bylaws, is organized and maintained in good faith, and meets all membership requirements set forth in subrule 77.3(5). 3. The association or group of employers sponsoring the self-insured MEWA applicant is engaged in substantial activity for its members other than sponsorship of an employee welfare benefit plan. 4. The association is a nonprofit entity organized or authorized to do business under applicable Iowa law. 5. No insurance producers or benefits consultants established, sponsored, administer, or serve as a trustee or on the governing body of the self-insured MEWA applicant. (8) A certificate from an authorized representative of the self-insured MEWA applicant that, to the best of the authorized representative’s knowledge and belief, the self-insured MEWA applicant is in compliance with all applicable provisions of the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.). (9) A description of and evidence of a mechanism, approved by the commissioner, to ensure that claims shall be paid in the event an employer member of the self-insured MEWA applicant is unable to comply with the self-insured MEWA applicant’s contribution requirements. (10) A copy of the most recent Form M-1 filed by the self-insured MEWA applicant with the U.S. Department of Labor, Pension and Welfare Benefits Administration. (11) Biographical affidavits from all members of the board of directors of the self-insured MEWA applicant. The affidavits shall be prepared using the current template for biographical affidavits prescribed by the National Association of Insurance Commissioners. This requirement shall not apply to any MEWA registered with the state prior to January 1, 2018. (12) Any additional information requested by the commissioner. b. The commissioner shall examine the application, the plan of operation, and any supporting documents submitted by the applicant. The commissioner may conduct any investigation that the commissioner may deem necessary and may examine under oath any persons interested in or connected with the self-insured MEWA applicant. c. Within a reasonable time, either the commissioner shall issue to the self-insured MEWA applicant a certificate of registration upon finding that the self-insured MEWA applicant has met all requirements or the commissioner shall deny the application for a certificate of registration and provide notice to the self-insured MEWA applicant setting forth reasons for finding that the self-insured MEWA applicant does not meet all the requirements. An unsuccessful applicant may file a new application for a certificate of registration at any time. 77.3(3) Financial requirements. a. Surplus. (1) Unless otherwise provided below or pursuant to the discretion of the commissioner, each self-insured MEWA shall deposit with an organization or trustee meeting the requirements of rule 191—32.4(508) cash, securities or any combination of these that is acceptable to the commissioner in the amount set forth below. In addition to the requirements set forth below, the commissioner may increase the amount required to be deposited based on the commissioner’s written determination that such an increase is necessary to adequately secure any potential liability of the self-insured MEWA to its employer members and enrollees, subject to Iowa Code chapter 17A proceedings. (2) The surplus requirement for a self-insured MEWA shall be the greater of: 1. $500,000; or 2. An amount equal to 10 percent of the written premium as of the previous December 31. b. Reserves and stop-loss coverage. (1) A self-insured MEWA shall have at all times aggregate excess stop-loss coverage providing the self-insured MEWA with coverage with an attachment point which is not greater than 120 percent of actuarially projected losses on a calendar-year basis. (2) A self-insured MEWA shall establish and maintain specific stop-loss coverage providing the self-insured MEWA with coverage with an attachment point which is not greater than 5 percent of annual expected claims for purposes of this subrule and shall provide for adjustments in the amount of that percentage as may be necessary to carry out the purposes of this subrule as determined by sound actuarial principles. (3) A self-insured MEWA shall establish and maintain appropriate loss and loss adjustment reserves determined by sound actuarial principles. (4) Premiums shall be set to fund at least 100 percent of the self-insured MEWA’s actuarially projected losses plus all other costs of the self-insured MEWA. (5) All coverage obtained pursuant to 77.3(3)“b”(1) and 77.3(3)“b”(2) shall contain a provision allowing for at least 90 days’ notice to the commissioner upon cancellation or nonrenewal of the contract. (6) No contract or policy of per-occurrence or aggregate excess insurance shall be recognized in considering the ability of an applicant to fulfill its financial obligations under this subrule, unless such contract or policy is issued by a person that is: 1. Licensed to transact business in this state; or 2. Authorized to do business in Iowa as an accredited or certified reinsurer. 77.3(4) Filing requirements. A self-insured MEWA shall file the following reports with the commissioner: a. Annual report.A self-insured MEWA shall annually, on or before the first day of March, file a report which has been verified by at least two of its principal officers and which covers the preceding calendar year. The report shall be on the form designated by the commissioner. The report shall be completed using statutory accounting practices and shall include information required by the commissioner. The commissioner may request additional reports and information from a self-insured MEWA as deemed necessary. b. Independent actuarial report.A self-insured MEWA shall annually, on or before the first day of March, file an independent actuarial opinion prepared in conformance with this rule. The commissioner may conduct an independent actuarial review of a self-insured MEWA in addition to the actuarial opinion required by this rule. The cost of any actuarial review shall be paid by the self-insured MEWA. c. Certificate of compliance.A self-insured MEWA shall annually, on or before the first day of March, file a certificate of compliance, which shall be signed and dated by the appropriate officer representing the self-insured MEWA and shall certify all of the following: (1) That the plan meets the requirements of this rule and the applicable provisions of Iowa statutes and regulations. (2) That an independent actuarial opinion that attests to the adequacy of reserves, rates, and the financial condition of the plan has been attached to the certificate of compliance. The actuarial opinion must include, but is not limited to, a brief commentary about the adequacy of the reserves, rates, and other financial condition of the plan, a test of the prior year’s claim reserve, a brief description of how the reserves were calculated, and whether or not the plan is able to cover all reasonably anticipated expenses. The actuarial opinion shall be prepared, signed, and dated by a person who is a member of the American Academy of Actuaries. (3) That a written complaint procedure has been implemented. The certificate of compliance shall also list the number of complaints filed by participants under the written complaint procedure, and the percentage of participants filing written complaints in the prior calendar year. (4) That the self-insured MEWA has contracted with an insurer authorized to do the business of insurance in this state or with a third-party administrator that holds a current certificate of registration issued by the commissioner pursuant to Iowa Code section 510.21. d. Quarterly updates.A MEWA formed after January 1, 2018, shall provide during the first year after the commissioner issues the self-insured MEWA’s certificate of registration a quarterly update comparing projections to actual experience. e. Modifications to plan of operation.A self-insured MEWA shall file any modifications to the self-insured MEWA’s plan of operation, including but not limited to amendments to articles of incorporation and bylaws. 77.3(5) Membership requirements. a. Any employer group or association that intends to form a self-insured MEWA shall have been established for a good-faith purpose other than for the purpose of providing insurance or a health plan. b. The employer group or association that wishes to form a self-insured MEWA shall have been in existence for a period of five years at the time it seeks a certificate of registration as a self-insured MEWA. c. The employer group or association sponsoring the self-insured MEWA shall collect annual dues from its employer members. d. Each employer member that participates in an employee welfare benefit plan offered by the self-insured MEWA may only provide coverage to “eligible employees” as defined in Iowa Code section 513B.2. This requirement only applies to the type of employees permitted to be employed by an employer member of the self-insured MEWA and has no impact on what type of rating must be utilized by the self-insured MEWA. e. Any employer member that participates in an employee welfare benefit plan offered by a self-insured MEWA shall be a member of the employer group or association sponsoring the self-insured MEWA. f. Any employer member that participates in an employee welfare benefit plan offered by a self-insured MEWA shall be required to participate in the self-insured MEWA for a period of not less than five calendar years. Any contract issued by a self-insured MEWA to an employer shall contain reasonable enforcement provisions, including but not limited to reasonable fees or assessments for early departure or for enrollment in another MEWA during the early-departure period. g. The activities of the self-insured MEWA, including the establishment and maintenance of the employee welfare benefit plan, shall be controlled by the self-insured MEWA’s employer members, either directly or indirectly through the regular nomination and election of directors, trustees, officers, or other similar representatives to control on the employer members’ behalf. h. The membership requirements set forth in paragraphs 77.3(5)“a” through 77.3(5)“g” are not applicable to self-insured MEWAs that received a certificate of registration from the commissioner prior to January 1, 2018. 77.3(6) Policy or contract. All contracts issued by a self-insured MEWA shall comply with the following: a. Notice to purchasers.Every self-insured MEWA application for coverage under the health plan and every policy and certificate issued by a self-insured MEWA shall contain in 14-point type or, if electronic, of equivalent prominence, on the front page the following notice prominently displayed:NOTICE This policy is issued by a multiple employer welfare arrangement (MEWA). MEWAs are not subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your MEWA. Please review the policy closely to understand the covered benefits. b. Guaranteed issue.Self-insured MEWAs shall offer on a guaranteed-issue basis health coverage to all individuals who qualify as enrollees of the employee welfare benefit plan offered by an employer member participating in the self-insured MEWA. c. Types of benefits that can be offered.Self-insured MEWAs shall offer only medical, dental, optical, surgical, hospital, accident and sickness, prescription, life insurance, or disability benefits. A self-insured MEWA that offers life insurance benefits shall comply with all applicable provisions of the Iowa Code relating to life insurance and life insurance companies. d. Compliance with HIPAA.All contracts or policies issued by a self-insured MEWA shall conform to all the provisions of P.L. 104-191, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), including but not limited to guaranteed issue of all products, preexisting condition limitations, renewability, and portability provisions as well as the issuance of prior coverage certificates to enrollees no longer eligible for plan coverage. e. Compliance with state mandates.The employee welfare benefit plan offered by a self-insured MEWA shall comply with all applicable state mandates, including Iowa Code chapter 514C, as if the health benefit plan were a group health policy under Iowa Code chapter 509. f. Actuarial value.Every health benefit plan offered by an insurer to a self-insured MEWA must contain a level of coverage equal to or greater than that designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. 77.3(7) Disclosure. The following disclosure shall be made to each employer member of the self-insured MEWA in 14-point type or, if electronic, of equivalent prominence, on the front page of the policy or certificate:The benefits and coverages described herein are provided through a self-insured trust fund established and funded in full or in part by a group of employers. It is not a licensed insurance company, and it is not protected by a guaranty fund in the event of insolvency. 77.3(8) Filing fee. A filing fee of $100 shall accompany each application for a certificate of registration as a self-insured MEWA. 77.3(9) Agreements and management contracts. Any agreement between the self-insured MEWA and any administrator, service company, or other entity shall be made available for review in the office of the commissioner upon request by the commissioner. 77.3(10) Examination. a. Each self-insured MEWA shall be subject to examination by the commissioner in accordance with Iowa Code chapter 507, as a “company,” and as if the self-insured MEWA is an “insurer,” under the definitions of that chapter. Iowa Code chapter 507 shall govern all aspects of the examination. b. The commissioner may make an examination of a self-insured MEWA as often as the commissioner considers it necessary, but not less frequently than once every five years. The expenses of the examination shall be assessed against the self-insured MEWA being examined in a manner in which expenses of examinations are assessed against a company under Iowa Code chapter 507. 77.3(11) Trade practices and enforcement. A self-insured MEWA is subject to applicable provisions of Iowa Code chapter 507B, and rules promulgated under that chapter, as if the self-insured MEWA is a “person” as defined in Iowa Code section 507B.2(1). The commissioner may investigate whether a self-insured MEWA has violated this rule and, after a hearing conducted pursuant to Iowa Code chapter 17A, may enter any orders authorized under Iowa Code chapter 505, 507A or 507B. 77.3(12) Insolvency. The provisions of Iowa Code chapter 507C shall apply to self-insured MEWAs, which shall be considered insurers for purposes of that chapter. However, a self-insured MEWA shall not be subject to Iowa Code chapter 508C. 77.3(13) Suspension or revocation of certificate of registration. The commissioner may sanction a self-insured MEWA or suspend or revoke any certificate of registration issued to a self-insured MEWA upon any of the following grounds: a. Failure to comply with any provision of these rules or any applicable provision of the Iowa Code. b. Failure to comply with any lawful order of the commissioner. c. Failure to promptly pay lawful benefit claims. d. Committing an unfair or deceptive act or practice. e. Deterioration of financial condition adversely affecting the self-insured MEWA’s ability to pay claims. f. A finding that the application or any necessary forms that have been filed with the commissioner contain fraudulent information or omissions. g. A finding that the self-insured MEWA or its administrator has misappropriated, converted, illegally withheld, or refused to pay over upon proper demand any moneys that belong to an employer member, a participant, or a person otherwise entitled thereto and that have been entrusted to the self-insured MEWA or its administrator in its fiduciary capacity. These rules are intended to implement Iowa Code chapter 507A; 2018 Iowa Acts, Senate File 2349; and U.S. Department of Labor 83 FR 28912. [Filed Emergency After Notice 9/7/18, effective 9/12/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4040CInsurance Division[191]Adopted and Filed Emergency

Rule making related to fully insured multiple employer welfare arrangements and fully insured and self-insured association health plans

The Insurance Division hereby amends Chapter 77, “Multiple Employer Welfare Arrangements,” Iowa Administrative Code. Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code sections 505.8 and 507A.4; 2018 Iowa Acts, Senate File 2349; and U.S. Department of Labor, 83 FR 28912.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 507A; 2018 Iowa Acts, Senate File 2349; and U.S. Department of Labor, 83 FR 28912.Purpose and Summary The new rules adopted herein serve two purposes, explained below; a third purpose of regulatory clarity is met by including in one chapter both these rules together with the rules in ARC 4039C, IAB 9/26/18, on self-insured multiple employer welfare arrangements. The first purpose of the new rules is to comply with 2018 Iowa Acts, Senate File 2349, section 2, which requires the Insurance Commissioner to adopt rules to implement the legislation’s provisions. Senate File 2349 provides, among other things, that an entity that wants to act in Iowa as a multiple employer welfare arrangement (MEWA) must, in addition to meeting the other requirements of Iowa Code chapter 507A, meet certain “membership stability” requirements set forth by the Insurance Commissioner by rule. The new rules included in this rule making are intended to set forth such membership requirements for entities wishing to establish a fully insured MEWA, by ascertaining that there is a firm foundation for the stability of the underlying organization. Such stability is critical to ensure consumer protection. Concurrently with the adoption of these rules, the Division has promulgated an Adopted and Filed Emergency After Notice rule making (ARC 4039C), which rescinds current Chapter 77 and replaces it with a new Chapter 77 whose rules set forth such membership requirements for entities wishing to establish a self-insured MEWA. During the comment period for the Notice of Intended Action (ARC 3894C, IAB 7/18/18) in which new Chapter 77 was proposed, the Insurance Division received comments from stakeholders who asked about the extent of the application of those new rules to fully insured MEWAs. Accordingly, by making changes to the Noticed rules of ARC 3894C and incorporating those changes in the adopted rules in ARC 4039C, the Division clarified that those rules shall apply only to self-insured MEWAs. In that rule making, together with this rule making (in which the Division clarifies that some of these rules specifically apply only to fully insured MEWAs), the Division addresses the confusion and clarifies the requirements for both types of MEWAs. The second purpose intended by these new rules is to address the U.S. Department of Labor’s rule 83 FR 28912 (DOL rule), issued on June 19, 2018, which establishes criteria for the creation and administration of association health plans (AHPs) and permits the establishment of AHPs in a staggered implementation timeline beginning September 1, 2018. The new DOL rule establishes some criteria under the Employee Retirement Income Security Act (ERISA) (Section 3(5)) that are in addition to criteria already there. The new criteria permit a determination whereby employers may join together in a group or association of employers and whereby, if the criteria are met, the group or association of employers will be permitted to be treated as if they were an employer sponsor of a single multiple employer “employee welfare benefit plan” and “group health plan,” as those terms are defined in Title I of ERISA. The DOL rule establishes a more flexible “commonality of interest” test for the employer members to support the establishment and maintenance of AHPs under ERISA. The DOL rule facilitates the adoption and administration of AHPs and expands access to affordable health coverage. In anticipation of the DOL rule, the Iowa Legislature granted the Insurance Commissioner rule-making authority, including emergency rule-making authority, over such AHPs in 2018 Iowa Acts, Senate File 2349, sections 5 and 7. The rules adopted in this rule making provide a framework for the establishment of both fully insured and self-insured AHPs, as contemplated in the DOL rule. The DOL rule contains a staggered implementation timeline, allowing associations to establish a fully insured AHP beginning September 1, 2018. This rule making is adopted emergency in order to comply with both the requirements of the DOL rule and the authority granted to the Commissioner in 2018 Iowa Acts, Senate File 2349, sections 5 and 7.Reason for Adoption of Rule Making Without Prior Notice and Opportunity for Public Participation Pursuant to Iowa Code section 17A.4(3), the Division finds that notice and public participation are unnecessary or impractical because the statute so provides. In compliance with Iowa Code section 17A.4(3), these rules are filed emergency for two purposes. First, these rules are filed emergency, as the concurrent filing to ARC 4039C, to complete the clarification of how the rules in Chapter 77 apply to both self-insured MEWAs and fully insured MEWAs. Second, these rules are filed emergency to provide guidance for associations to establish AHPs, as permitted by the DOL rule beginning September 1, 2018, while providing consumer protection to Iowa consumers. All of the rules in this rule making fall within the authority of the Commissioner to file emergency rules under 2018 Iowa Acts, Senate File 2349, sections 5, 6 and 7. As part of the federal rule-making process, notice of the proposed rule was provided on February 20, 2018, and public comment was accepted from that date through April 21, 2018. (The comment submitted by the Insurance Division can be found at www.regulations.gov/document?D=CMS-2018-0015-8866.) Delays caused by the notice and public participation requirements of Iowa Code section 17A.4 would be contrary to public interest, and these rules are also published under Notice of Intended Action as ARC 4041C (IAB 9/26/18) to allow for public comment.Reason for Waiver of Normal Effective Date Pursuant to Iowa Code section 17A.5(2)“b”(1)(a) and (b), the Division also finds that the normal effective date of this rule making, 35 days after publication, should be waived and the rule making made effective on September 12, 2018. First, the Commissioner was given authority to adopt emergency rules under 2018 Iowa Acts, Senate File 2349, section 7, which meets the requirement of Iowa Code section 17A.5(2)“b”(1)(a). Second, the rule making confers public benefits, as described in the prior section and further in this paragraph, which meets the requirement of Iowa Code section 17A.5(2)“b”(1)(b). The Division finds that the availability and affordability of health insurance is critical for the greater public interest, and the necessity of ensuring that MEWA and AHP coverage has appropriate consumer protections requires these rules to be immediately implemented.Adoption of Rule Making This rule making was adopted by Doug Ommen, Iowa Insurance Commissioner, on September 6, 2018.Concurrent Publication of Notice of Intended Action In addition to its adoption on an emergency basis, this rule making has been initiated through the normal rule-making process and is published herein under Notice of Intended Action as ARC 4041C to allow for public comment.Fiscal Impact This rule making may have some fiscal impact to the State of Iowa, in that an increase in the number of these plans being sold would increase the amount of premium tax funds collected by the State from insurance companies providing coverage to fully insured MEWAs and fully insured AHPs.Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers The Division’s general waiver provisions of 191—Chapter 4 apply to these rules.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 became effective on September 12, 2018. The following rule-making action is adopted:

ITEM 1. Adopt the following new rules 191—77.4(507A) to 191—77.6(507A):

191—77.4(507A) Fully insured multiple employer welfare arrangements. 77.4(1) Certificate of registration. A person shall not establish or maintain a fully insured employee welfare benefit plan that is a fully insured MEWA in this state unless the MEWA obtains and maintains a certificate of registration pursuant to this rule. Such certificate of registration is required for all MEWAs that elect to offer fully insured employee welfare benefit plans to residents of this state whether or not the MEWA is domiciled in the state. 77.4(2) Application for certificate of registration. a. A person wishing to obtain a certificate of registration as a fully insured MEWA pursuant to this chapter shall submit an application for registration to the commissioner. This application shall include the following: (1) A business plan, including a copy of all health coverage contracts or other instruments which the fully insured MEWA applicant proposes to make with or sell to its employer members or its association’s or group’s members, a copy of its health coverage description, and the printed matter to be used in the solicitation of employer members or its association’s or group’s members to purchase the health coverage. (2) Copies of all articles, bylaws, agreements, or other documents or instruments describing the rights and obligations of employers, employees, and beneficiaries with respect to the fully insured MEWA applicant. (3) A current list of all members of the employer group or association sponsoring the fully insured MEWA applicant, a description of the relationship among the employers, a description of how the relationship serves as the basis for the formation of the association or employer group, and a description of how the employer group or association complies with paragraphs 77.4(4)“a” and 77.4(4)“b,” if applicable. (4) A description of the activities of the association or group of employers on behalf of its employer members or its association’s or group’s members other than the sponsorship of the fully insured MEWA applicant, to further demonstrate compliance with 77.4(4)“a,” if applicable. (5) A statement from an authorized representative of the fully insured MEWA applicant that certifies all of the following: 1. The fully insured MEWA applicant shall be administered by an insurer authorized to do the business of insurance in this state or by an authorized third-party administrator that holds a current certificate of registration issued by the commissioner pursuant to Iowa Code section 510.21. 2. The fully insured MEWA applicant is established by a trade, industry, or professional association of employers that has a constitution or bylaws, is organized and maintained in good faith, and meets all membership requirements set forth in subrule 77.4(4). 3. The association or group of employers sponsoring the fully insured MEWA applicant is engaged in substantial activity for its members other than sponsorship of an employee welfare benefit plan. 4. The association is a nonprofit entity organized or authorized to do business under applicable Iowa law. 5. No insurance producers or benefits consultants established, sponsored, administer, or serve as a trustee or on the governing body of the fully insured MEWA applicant. (6) A certificate from an authorized representative of the fully insured MEWA applicant that, to the best of the authorized representative’s knowledge and belief, the fully insured MEWA applicant is in compliance with all applicable provisions of the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.). (7) A description of and evidence of a mechanism, approved by the commissioner, to ensure that claims shall be paid in the event a member of the fully insured MEWA applicant is unable to comply with the fully insured MEWA applicant’s contribution requirements. (8) A copy of the most recent Form M-1 filed by the fully insured MEWA applicant with the U.S. Department of Labor, Pension and Welfare Benefits Administration. (9) Biographical affidavits from all members of the board of directors of the fully insured MEWA applicant. The affidavits shall be prepared using the current template for biographical affidavits prescribed by the National Association of Insurance Commissioners. This requirement shall not apply to any MEWA registered with the state prior to January 1, 2018. (10) Any additional information requested by the commissioner. b. The commissioner shall examine the application and any supporting documents submitted by the fully insured MEWA applicant. The commissioner may conduct any investigation that the commissioner may deem necessary and may examine under oath any persons interested in or connected with the fully insured MEWA applicant. c. Within a reasonable time, either the commissioner shall issue to the fully insured MEWA applicant a certificate of registration upon finding that the fully insured MEWA applicant has met all requirements or the commissioner shall deny the application for a certificate of registration and provide notice to the fully insured MEWA applicant setting forth reasons for finding that the fully insured MEWA applicant does not meet all the requirements. An unsuccessful applicant may file a new application for a certificate of registration at any time. 77.4(3) Filing requirements. A fully insured MEWA shall annually, on or before the first day of March, file a certificate of compliance, which shall be signed and dated by the fully insured MEWA’s authorized representative and shall certify all of the following: a. That the fully insured MEWA meets the requirements of this rule and the applicable provisions of Iowa statutes and regulations; and b. That the fully insured MEWA has contracted with an insurer authorized to do the business of insurance in this state or with a third-party administrator that holds a current certificate of registration issued by the commissioner pursuant to Iowa Code section 510.21. 77.4(4) Membership requirements. a. Any employer group or association that intends to form a fully insured MEWA shall have been established for a good-faith purpose other than for the purpose of providing insurance or a health plan. b. The employer group or association that wishes to form a fully insured MEWA shall have been in existence for a period of five years at the time it seeks a certificate of registration as a fully insured MEWA. c. The employer group or association sponsoring the fully insured MEWA shall collect annual dues from its employer members. d. Each employer member that participates in an employee welfare benefit plan offered by the fully insured MEWA may only provide coverage to “eligible employees” as defined in Iowa Code section 513B.2. This requirement only applies to the type of employees permitted to be employed by an employer member of the fully insured MEWA and has no impact on what type of rating must be utilized by the fully insured MEWA. e. Any employer member that participates in an employee welfare benefit plan offered by a fully insured MEWA shall be a member of the employer group or association sponsoring the fully insured MEWA. f. Any employer member that participates in an employee welfare benefit plan offered by a fully insured MEWA shall be required to participate in the fully insured MEWA for a period of not less than five calendar years. Any contract issued by a fully insured MEWA to an employer shall contain reasonable enforcement provisions, including but not limited to reasonable fees or assessments for early departure or for enrollment in another fully insured MEWA during the early-departure period. g. The activities of the fully insured MEWA, including the establishment and maintenance of the employee welfare benefit plan, shall be controlled by the fully insured MEWA’s employer members, either directly or indirectly through the regular nomination and election of directors, trustees, officers, or other similar representatives to control on the employer members’ behalf. h. The membership requirements set forth in paragraphs 77.4(4)“a” through 77.4(4)“g” are not applicable to fully insured MEWAs that received a certificate of registration from the commissioner prior to January 1, 2018. 77.4(5) Policy or contract. Every health benefit plan offered by any insurer to the fully insured MEWA shall comply with the following: a. Notice to purchasers.Every health benefit plan application for coverage and every policy and certificate issued by an insurer to the fully insured MEWA shall contain in 14-point type or, if electronic, of equivalent prominence, on the front page the following notice prominently displayed:NOTICEThis policy is issued by a fully insured multiple employer welfare arrangement (MEWA). MEWAs are not subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your MEWA.Please review the policy closely to understand the covered benefits. b. Guaranteed issue.An insurer offering a health benefit plan to a fully insured MEWA shall guarantee acceptance of all eligible individuals who are part of the employer members or association’s or group’s members of the fully insured MEWA and, if coverage is offered to spouses and dependents, to all of the spouses and dependents. c. Types of benefits that can be offered.Fully insured MEWAs shall offer only medical, dental, optical, surgical, hospital, accident and sickness, prescription, life insurance, or disability benefits. A fully insured MEWA that offers life insurance benefits shall comply with all applicable provisions of the Iowa Code relating to life insurance and life insurance companies. d. Compliance with HIPAA.All contracts or policies issued by an insurer to a fully insured MEWA shall conform to all the provisions of P.L. 104-191, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), including but not limited to guaranteed issue of all products, preexisting condition limitations, renewability, and portability provisions as well as the issuance of prior coverage certificates to enrollees no longer eligible for plan coverage. e. Compliance with state mandates.Every health benefit plan offered by an insurer to a fully insured MEWA shall comply with all applicable state mandates, including Iowa Code chapter 514C, as if the health benefit plan were a group health policy under Iowa Code chapter 509. f. Actuarial value.Every health benefit plan offered by an insurer to a fully insured MEWA must contain a level of coverage equal to or greater than that designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. 77.4(6) Trade practices and enforcement. A fully insured MEWA is subject to applicable provisions of Iowa Code chapter 507B, and rules promulgated under that chapter, as if the fully insured MEWA is a “person” as defined in Iowa Code section 507B.2(1). The commissioner may investigate whether a fully insured MEWA or an insurer providing health benefit plans under the direction of a fully insured MEWA has violated this rule and, after a hearing conducted pursuant to Iowa Code chapters 17A and 507B, may enter any orders authorized under Iowa Code chapter 505, 507A, or 507B or any other applicable chapters. 77.4(7) Filing fee. A filing fee of $100 shall accompany each application for a certificate of registration as a fully insured MEWA. 77.4(8) Suspension or revocation of certificate of registration. The commissioner may sanction a fully insured MEWA or suspend or revoke any certificate of registration issued to a fully insured MEWA upon any of the following grounds: a. Failure to comply with any provision of these rules or any applicable provision of the Iowa Code. b. Failure to comply with any lawful order of the commissioner. c. A finding that the application or any necessary forms that have been filed with the commissioner contain fraudulent information or omissions.

191—77.5(507A,513D) Self-insured association health plans. 77.5(1) Certificate of registration. A person shall not establish or maintain a self-insured association health plan in this state unless the self-insured AHP obtains and maintains a certificate of registration pursuant to this rule. Such certificate of registration is required for all AHPs that elect to offer self-insured association health plans to residents of this state whether or not the AHP is domiciled in the state. 77.5(2) Application for certificate of registration. a. A person wishing to obtain a certificate of registration as a self-insured AHP pursuant to this chapter shall submit an application and a plan of operation to the commissioner. This application and plan of operation shall include the following: (1) A business plan, including a copy of all health coverage contracts or other instruments which the self-insured AHP applicant proposes to make with or sell to its employer members or its association’s or group’s members, a copy of its health coverage description and the printed matter to be used in the solicitation of employer members or its association’s or group’s members to purchase the health coverage. (2) Copies of all articles, bylaws, agreements, or other documents or instruments describing the rights and obligations of employers, employees, and beneficiaries with respect to the self-insured AHP applicant. (3) A current list of all members of the employer group or association sponsoring the self-insured AHP applicant, a description of the relationship among the employers, a description of how the relationship serves as the basis for the formation of the association or employer group, and a description of how the employer group or association complies with paragraphs 77.5(5)“a” and 77.5(5)“b,” if applicable. (4) A description of the activities of the association or group of employers on behalf of its employer members or its association’s or group’s members other than the sponsorship of the self-insured AHP applicant, to further demonstrate compliance with paragraph 77.5(5)“a,” if applicable. (5) Current financial statements of the self-insured AHP applicant that shall include, at a minimum, balance sheets, an income statement, a cash flow statement and a detailed listing of assets. (6) An actuarial opinion which is prepared, signed, and dated by a person who is a member of the American Academy of Actuaries and which states that appropriate loss and loss adjustment reserves have been established, that adequate premiums are being charged, and that the association is operating in accordance with sound actuarial principles and in conformance with this rule. (7) A statement from an authorized representative of the self-insured AHP applicant that certifies all of the following: 1. The self-insured AHP applicant shall be administered by an insurer authorized to do business in this state or by an authorized third-party administrator that holds a current certificate of registration issued by the commissioner pursuant to Iowa Code section 510.21. 2. The self-insured AHP applicant is established by a trade, industry, or professional association of employers that has a constitution or bylaws, is organized and maintained in good faith, and meets all membership requirements set forth in subrule 77.5(5). 3. The association or group of employers sponsoring the self-insured AHP applicant is engaged in at least one substantial business purpose for its members other than sponsorship of an employee welfare benefit plan. 4. The association is a nonprofit entity organized or authorized to do business under applicable Iowa law. 5. No insurance producers or benefits consultants established, sponsored, administer, or serve as a trustee or on the governing body of the self-insured AHP applicant. (8) A certificate from an authorized representative of the self-insured AHP applicant that, to the best of the authorized representative’s knowledge and belief, the self-insured AHP applicant is in compliance with all applicable provisions of the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.). (9) A description of and evidence of a mechanism, approved by the commissioner, to ensure that claims shall be paid in the event a member of the self-insured AHP applicant is unable to comply with the self-insured AHP applicant’s contribution requirements. (10) A copy of the most recent Form M-1 filed by the self-insured AHP applicant with the U.S. Department of Labor, Pension and Welfare Benefits Administration. (11) Biographical affidavits from all members of the board of directors of the self-insured AHP applicant. The affidavits shall be prepared using the current template for biographical affidavits prescribed by the National Association of Insurance Commissioners. (12) Any additional information requested by the commissioner. b. The commissioner shall examine the application, the plan of operation, and any supporting documents submitted by the self-insured AHP applicant. The commissioner may conduct any investigation that the commissioner may deem necessary and may examine under oath any persons interested in or connected with the self-insured AHP applicant. c. Within a reasonable time, either the commissioner shall issue to the self-insured AHP applicant a certificate of registration upon finding that the self-insured AHP applicant has met all requirements or the commissioner shall deny the application for a certificate of registration and provide notice to the self-insured AHP applicant setting forth reasons for finding that the self-insured AHP applicant does not meet all the requirements. An unsuccessful self-insured AHP applicant may file a new application for a certificate of registration at any time. 77.5(3) Financial requirements. a. Surplus. (1) Unless otherwise provided below or pursuant to the discretion of the commissioner, each self-insured AHP shall deposit with an organization or trustee meeting the requirements of rule 191—32.4(508) cash, securities or any combination of these that is acceptable to the commissioner in the amount set forth below. In addition to the requirements set forth below, the commissioner may increase the amount required to be deposited based on the commissioner’s written determination that such an increase is necessary to adequately secure any potential liability of the self-insured AHP to its employer members and enrollees, subject to Iowa Code chapter 17A proceedings. (2) The surplus requirement for a self-insured AHP shall be the greater of: 1. $500,000; or 2. An amount equal to 10 percent of the written premium as of the previous December 31. b. Reserves and stop-loss coverage. (1) A self-insured AHP shall have at all times aggregate excess stop-loss coverage providing the self-insured AHP with coverage with an attachment point which is not greater than 120 percent of actuarially projected losses on a calendar-year basis. (2) A self-insured AHP shall establish and maintain specific stop-loss coverage providing the self-insured AHP with coverage with an attachment point which is not greater than 5 percent of annual expected claims for purposes of this subrule and shall provide for adjustments in the amount of that percentage as may be necessary to carry out the purposes of this subrule as determined by sound actuarial principles. (3) A self-insured AHP shall establish and maintain appropriate loss and loss adjustment reserves determined by sound actuarial principles. (4) Premiums shall be set to fund at least 100 percent of the self-insured AHP’s actuarially projected losses plus all other costs of the self-insured AHP. (5) All coverage obtained pursuant to 77.5(3)“b”(1) and 77.5(3)“b”(2) shall contain a provision allowing for at least 90 days’ notice to the commissioner upon cancellation or nonrenewal of the contract. (6) No contract or policy of per-occurrence or aggregate excess insurance shall be recognized in considering the ability of an applicant to fulfill its financial obligations under this subrule, unless such contract or policy is issued by a company that is: 1. Licensed to transact business in this state; or 2. Authorized to do business in Iowa as an accredited or certified reinsurer. 77.5(4) Filing requirements. A self-insured AHP shall file the following reports with the commissioner: a. Annual report.A self-insured AHP shall annually, on or before the first day of March, file a report which has been verified by at least two of its principal officers and which covers the preceding calendar year. The report shall be on the form designated by the commissioner. The report shall be completed using statutory accounting practices and shall include information required by the commissioner. The commissioner may request additional reports and information from a self-insured AHP as deemed necessary. b. Independent actuarial report.A self-insured AHP shall annually, on or before the first day of March, file an independent actuarial opinion prepared in conformance with this rule. The commissioner may conduct an independent actuarial review of a self-insured AHP in addition to the actuarial opinion required by this rule. The cost of any actuarial review shall be paid by the AHP. c. Certificate of compliance.A self-insured AHP shall annually, on or before the first day of March, file a certificate of compliance, which shall be signed and dated by the appropriate officer representing the self-insured AHP and shall certify all of the following: (1) That the plan meets the requirements of this rule and the applicable provisions of Iowa statutes and regulations. (2) That an independent actuarial opinion that attests to the adequacy of reserves, rates, and the financial condition of the plan has been attached to the certificate of compliance. The actuarial opinion must include, but is not limited to, a brief commentary about the adequacy of the reserves, rates, and other financial condition of the plan, a test of the prior year’s claim reserve, a brief description of how the reserves were calculated, and whether or not the plan is able to cover all reasonably anticipated expenses. The actuarial opinion shall be prepared, signed, and dated by a person who is a member of the American Academy of Actuaries. (3) That a written complaint procedure has been implemented. The certificate of compliance shall also list the number of complaints filed by participants under the written complaint procedure, and the percentage of participants filing written complaints in the prior calendar year. (4) That the self-insured AHP has contracted with an insurer authorized to do the business of insurance in this state or with a third-party administrator that holds a current certificate of registration issued by the commissioner pursuant to Iowa Code section 510.21. d. Quarterly updates.A self-insured AHP formed on or after September 12, 2018, shall provide during the first year after the commissioner issues the self-insured AHP’s certificate of registration a quarterly update comparing projections to actual experience. e. Modifications to plan of operation.A self-insured AHP shall file any modifications to the self-insured AHP’s plan of operation, including but not limited to amendments to articles of incorporation and bylaws. 77.5(5) Membership requirements. a. Any employer group or association that intends to form a self-insured AHP must have at least one substantial business purpose unrelated to offering and providing health coverage or other employee benefits to its employer members and their employees as set forth in 29 CFR Section 2510.3-5(b)(1). b. The employer group or association that wishes to form a self-insured AHP shall have been in existence for a period of five years at the time it seeks a certificate of registration as an AHP. c. The employer group or association sponsoring the self-insured AHP shall collect annual dues from its employer members. d. Each employer member of the group or association participating in the group health plan must be a person acting directly as an employer of at least one employee who is a participant covered under the plan. A working owner of a trade or business without common law employees may qualify as both an employer and employee when such working owner meets the requirements set forth in 29 CFR Section 2510.3-5(e). e. Employer members of a group or association must demonstrate that there is a commonality of interest as defined in 29 CFR Section 2510.3-5(c). f. Any employer member that participates in an employee welfare benefit plan offered by an AHP shall be a member of the employer group or association sponsoring the self-insured AHP. g. Any employer member that participates in an employee welfare benefit plan offered by a self-insured AHP shall be required to participate in the self-insured AHP for a period of not less than five calendar years. Any contract issued by a self-insured AHP to an employer shall contain reasonable enforcement provisions, including but not limited to reasonable fees or assessments for early departure and for enrollment in another self-insured AHP during the early-departure period. h. The activities of the self-insured AHP, including the establishment and maintenance of the employee welfare benefit plan, shall be controlled by the self-insured AHP’s employer members, either directly or indirectly through the regular nomination and election of directors, trustees, officers, or other similar representatives to control on the employer members’ behalf. 77.5(6) Policy or contract. All contracts issued by a self-insured AHP shall comply with the following: a. Notice to purchasers.Every self-insured AHP application for coverage under the health plan and every policy and certificate issued by a self-insured AHP shall contain in 14-point type or, if electronic, of equivalent prominence, on the front page the following notice prominently displayed:NOTICEThis policy is issued by an association health plan (AHP), a type of multiple employee welfare arrangement (MEWA). MEWAs are not subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your AHP MEWA.Please review the policy closely to understand the covered benefits. b. Guaranteed issue.Self-insured AHPs shall offer on a guaranteed-issue basis health coverage to all individuals who qualify as enrollees of the employee welfare benefit plan offered by an employer member participating in the self-insured AHP. Further, if coverage is offered to spouses and dependents, the AHP shall offer on a guaranteed-issue basis health coverage to all of the spouses and dependents. c. Types of benefits that can be offered.Self-insured AHPs shall offer only medical, dental, optical, surgical, hospital, accident and sickness, prescription, life insurance, or disability benefits. A self-insured AHP that offers life insurance benefits shall comply with all applicable provisions of the Iowa Code relating to life insurance and life insurance companies. d. Compliance with HIPAA.All contracts or policies issued by a self-insured AHP shall conform to all the provisions of P.L. 104-191, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), including but not limited to guaranteed issue of all products, preexisting condition limitations, renewability, and portability provisions as well as the issuance of prior coverage certificates to enrollees no longer eligible for plan coverage. e. Compliance with state mandates.The health benefit plan offered by a self-insured AHP shall comply with all applicable state mandates, including Iowa Code chapter 514C, as if such self-insured AHP were offering a group health policy under Iowa Code chapter 509. f. Actuarial value.Every health benefit plan offered by a self-insured AHP must contain a level of coverage equal to or greater than that designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. g. Nondiscrimination.The self-insured AHP, and any health coverage offered by the self-insured AHP, must comply with the nondiscrimination provisions set forth in 29 CFR Section 2510.3-5(d)(1)-(5). 77.5(7) Disclosure. The following disclosure shall be made to each employer member of the self-insured AHP:The benefits and coverages described herein are provided through a self-insured trust fund established and funded in full or in part by a group of employers. It is not a licensed insurance company, and it is not protected by a guaranty fund in the event of insolvency. 77.5(8) Filing fee. A filing fee of $100 shall accompany each application for a certificate of registration as a self-insured AHP. 77.5(9) Applicability date. This rule is applicable on January 1, 2019, for any association that is in existence as of June 21, 2018. This rule is applicable on April 1, 2019, for any other employee welfare benefit plan established to be operated as an association health plan sponsored by a group or association of employers as set forth herein. 77.5(10) Agreements and management contracts. Any agreement between the self-insured AHP and any administrator, service company, or other entity shall be made available for review in the office of the commissioner upon request by the commissioner. 77.5(11) Examination. a. Each self-insured AHP shall be subject to examination by the commissioner in accordance with Iowa Code chapter 507, as a “company,” and as if the self-insured AHP is an “insurer,” under the definitions of that chapter. Iowa Code chapter 507 shall govern all aspects of the examination. b. The commissioner may make an examination of a self-insured AHP as often as the commissioner considers it necessary, but not less frequently than once every five years. The expenses of the examination shall be assessed against the self-insured AHP being examined in a manner in which expenses of examinations are assessed against a company under Iowa Code chapter 507. 77.5(12) Trade practices and enforcement. A self-insured AHP is subject Iowa Code chapter 507B, and rules promulgated under that chapter, as if the AHP is a “person” as defined in Iowa Code section 507B.2(1). The commissioner may investigate whether a self-insured AHP has violated this rule and, after a hearing conducted pursuant to Iowa Code chapters 17A and 507B, may enter any orders authorized under Iowa Code chapter 505, 507A, or 507B or any other applicable chapters. 77.5(13) Insolvency. The provisions of Iowa Code chapter 507C shall apply to self-insured AHPs, which shall be considered insurers for purposes of that chapter. However, a self-insured AHP shall not be subject to Iowa Code chapter 508C. 77.5(14) Suspension or revocation of certificate of registration. The commissioner may sanction a self-insured AHP or suspend or revoke any certificate of registration issued to an AHP upon any of the following grounds: a. Failure to comply with any provision of these rules or any applicable provision of the Iowa Code. b. Failure to comply with any lawful order of the commissioner. c. Failure to promptly pay lawful benefit claims. d. Committing an unfair or deceptive act or practice. e. Deterioration of financial condition adversely affecting the self-insured AHP’s ability to pay claims. f. A finding that the application or any necessary forms that have been filed with the commissioner contain fraudulent information or omissions. g. A finding that the self-insured AHP or its administrator has misappropriated, converted, illegally withheld, or refused to pay over upon proper demand any moneys that belong to an employer member, a participant, or a person otherwise entitled thereto and that have been entrusted to the self-insured AHP or its administrator in its fiduciary capacity.

191—77.6(507A) Fully insured association health plans. 77.6(1) Certificate of registration. A person shall not establish or maintain a fully insured association health plan in this state unless the group or association of employers obtains and maintains a certificate of registration pursuant to this rule. Such certificate of registration is required for all fully insured association health plans that elect to offer fully insured association health plans to residents of this state whether or not the AHP is domiciled in the state. 77.6(2) Application for certificate of registration. a. A person wishing to obtain a certificate of registration as a fully insured AHP pursuant to this chapter shall submit an application to the commissioner. This application shall include the following: (1) A business plan, including a copy of all health coverage contracts or other instruments which the fully insured AHP applicant proposes to make with or sell to its employer members or its association’s or group’s members, a copy of its health coverage description, and the printed matter to be used in the solicitation of employer members or its association’s or group’s members to purchase the health coverage. (2) Copies of all articles, bylaws, agreements, or other documents or instruments describing the rights and obligations of employers, employees, and beneficiaries with respect to the fully insured AHP applicant. (3) A current list of all members of the employer group or association sponsoring the fully insured AHP applicant, a description of the relationship among the employers, a description of how the relationship serves as the basis for the formation of the association or employer group, and a description of how the employer group or association complies with paragraphs 77.6(4)“a” and 77.6(4)“b,” if applicable. (4) A description of the activities of the association or group of employers on behalf of its employer members or its association’s or group’s members other than the sponsorship of the fully insured AHP applicant, to further demonstrate compliance with paragraph 77.6(4)“a,” if applicable. (5) A statement from an authorized representative of the fully insured AHP applicant that certifies all of the following: 1. The fully insured AHP applicant shall be administered by an insurer authorized to do the business of insurance in this state or by an authorized third-party administrator that holds a current certificate of registration issued by the commissioner pursuant to Iowa Code section 510.21. 2. The fully insured AHP applicant is established by a trade, industry, or professional association of employers that has a constitution or bylaws, is organized and maintained in good faith, and meets all membership requirements set forth in subrule 77.6(4). 3. The association or group of employers sponsoring the fully insured AHP applicant is engaged in at least one substantial business purpose for its members other than sponsorship of an employee welfare benefit plan. 4. The association is a nonprofit entity organized or authorized to do business under applicable Iowa law. 5. No insurance producers or benefits consultants established, sponsored, administer, or serve as a trustee or on the governing body of the fully insured AHP applicant. (6) A certificate from an authorized representative of the fully insured AHP applicant that, to the best of the authorized representative’s knowledge and belief, the fully insured AHP applicant is in compliance with all applicable provisions of the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.). (7) A description of and evidence of a mechanism, approved by the commissioner, to ensure that claims shall be paid in the event a member of the fully insured AHP applicant is unable to comply with the fully insured AHP applicant’s contribution requirements. (8) A copy of the most recent Form M-1 filed by the fully insured AHP applicant with the U.S. Department of Labor, Pension and Welfare Benefits Administration. (9) Biographical affidavits from all members of the board of directors of the fully insured AHP applicant. The affidavits shall be prepared using the current template for biographical affidavits prescribed by the National Association of Insurance Commissioners. (10) Any additional information requested by the commissioner. b. The commissioner shall examine the application and any supporting documents submitted by the fully insured AHP applicant. The commissioner may conduct any investigation that the commissioner may deem necessary and may examine under oath any persons interested in or connected with the fully insured AHP applicant. c. Within a reasonable time, either the commissioner shall issue to the fully insured AHP applicant a certificate of registration upon finding that the fully insured AHP applicant has met all requirements or the commissioner shall deny the application for a certificate of registration and provide notice to the fully insured AHP applicant setting forth reasons for finding that the fully insured AHP applicant does not meet all the requirements. An unsuccessful fully insured AHP applicant may file a new application for a certificate of registration at any time. 77.6(3) Filing requirements. A fully insured AHP shall annually, on or before the first day of March, file a certificate of compliance, which shall be signed and dated by the appropriate officer representing the fully insured AHP and shall certify all of the following: a. That the plan meets the requirements of this rule and the applicable provisions of Iowa statutes and regulations. b. That the fully insured AHP has contracted with an insurer authorized to do the business of insurance in this state or with a third-party administrator that holds a current certificate of registration issued by the commissioner pursuant to Iowa Code section 510.21. 77.6(4) Membership requirements. a. Any employer group or association that intends to form a fully insured AHP must have at least one substantial business purpose unrelated to offering and providing health coverage or other employee benefits to its employer members and their employees as set forth in 29 CFR Section 2510.3-5(b)(1). b. The employer group or association that wishes to form a fully insured AHP shall have been in existence for a period of five years at the time it seeks a certificate of registration as a fully insured AHP. c. The employer group or association sponsoring the fully insured AHP shall collect annual dues from its employer members. d. Each employer member of the group or association participating in the association health plan must be a person acting directly as an employer of at least one employee who is a participant covered under the plan. A working owner of a trade or business without common law employees may qualify as both an employer and employee when such working owner meets the requirements set forth in 29 CFR Section 2510.3-5(e). e. Employer members of a group or association must demonstrate that there is a commonality of interest as defined in 29 CFR Section 2510.3-5(c). f. Any employer member that participates in an employee welfare benefit plan offered by a fully insured AHP shall be a member of the employer group or association sponsoring the AHP. g. Any employer member that participates in an employee welfare benefit plan offered by a fully insured AHP shall be required to participate in the fully insured AHP for a period of not less than five calendar years. Any contract issued by a fully insured AHP to an employer shall contain reasonable enforcement provisions, including but not limited to reasonable fees or assessments for early departure and for enrollment in another fully insured AHP during the early-departure period. h. The activities of the fully insured AHP, including the establishment and maintenance of the employee welfare benefit plan, shall be controlled by the fully insured AHP’s employer members, either directly or indirectly through the regular nomination and election of directors, trustees, officers, or other similar representatives to control on the employer members’ behalf. 77.6(5) Policy or contract. Every health benefit plan offered by any insurer to the fully insured AHP shall comply with the following: a. Notice to purchasers.Every health benefit plan application for coverage and every policy and certificate issued by an insurer to a fully insured AHP shall contain in 14-point type or, if electronic, of equivalent prominence, on the front page the following notice prominently displayed:NOTICEThis policy is issued by a fully insured association health plan (AHP), a type of multiple employer welfare arrangement (MEWA). MEWAs are not subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your AHP MEWA.Please review the policy closely to understand the covered benefits. b. Guaranteed issue.An insurer offering a health benefit plan to a fully insured AHP shall guarantee acceptance of all eligible individuals who are part of the employer members or association’s or group’s members of the fully insured AHP and, if coverage is offered to spouses and dependents, to all of the spouses and dependents. c. Types of benefits that can be offered.Fully insured AHPs shall offer only medical, dental, optical, surgical, hospital, accident and sickness, prescription, life insurance, or disability benefits. A fully insured AHP that offers life insurance benefits shall comply with all applicable provisions of the Iowa Code relating to life insurance and life insurance companies. d. Compliance with HIPAA.All contracts or policies issued by a fully insured AHP shall conform to all the provisions of P.L. 104-191, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), including but not limited to guaranteed issue of all products, preexisting condition limitations, renewability, and portability provisions as well as the issuance of prior coverage certificates to enrollees no longer eligible for plan coverage. e. Compliance with state mandates.Every health benefit plan offered by an insurer to a fully insured AHP shall comply with all applicable state mandates, including Iowa Code chapter 514C, as if the health benefit plan were a group health policy under Iowa Code chapter 509. f. Actuarial value.Every health benefit plan offered by an insurer to a fully insured AHP must contain a level of coverage equal to or greater than that designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. g. Nondiscrimination.Any health coverage offered by an insurer to the fully insured AHP must comply with the nondiscrimination provisions set forth in 29 CFR Section 2510.3-5(d)(1)-(5). 77.6(6) Filing fee. A filing fee of $100 shall accompany each application for a certificate of registration as a fully insured AHP. 77.6(7) Trade practices and enforcement. A fully insured AHP is subject to applicable provisions of Iowa Code chapter 507B, and rules promulgated under that chapter, as if the AHP is a “person” defined in Iowa Code section 507B.2(1). The commissioner may investigate whether a fully insured AHP or an insurer providing health benefit plans under the direction of a fully insured AHP has violated this rule and, after a hearing conducted pursuant to Iowa Code chapters 17A and 507B, may enter any orders authorized under Iowa Code chapter 505, 507A, or 507B or any other applicable chapters. 77.6(8) Suspension or revocation of certificate of registration. The commissioner may sanction a fully insured AHP or suspend or revoke any certificate of registration issued to a fully insured AHP upon any of the following grounds: a. Failure to comply with any provision of these rules or any applicable provision of the Iowa Code. b. Failure to comply with any lawful order of the commissioner. c. A finding that the application or any necessary forms that have been filed with the commissioner contain fraudulent information or omissions. [Filed Emergency 9/7/18, effective 9/12/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4010CPublic Safety Department[661]Filed Emergency After Notice

Rule making related to the statewide sobriety and drug monitoring program

The Department of Public Safety hereby adopts Chapter 159, “Statewide Sobriety and Drug Monitoring Program,” Iowa Administrative Code. Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 901D.4.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 901D.Purpose and Summary 2017 Iowa Acts, Senate File 444, division II, [codified as Iowa Code chapter 901D] established the statewide sobriety and drug monitoring program for the purpose of protecting the public health and welfare by reducing the number of people on the highways who operate a motor vehicle while under the influence of alcohol or a controlled substance and by reducing the number of repeat offenders who commit crimes in which the use of alcohol or a controlled substance is a contributing factor in the commission of the crime. The statute requires the Department to establish a statewide sobriety and drug monitoring program that will provide for testing which is available at least twice per day at designated times during the day, seven days per week. The program provides that a court or authorized government entity such as a sheriff’s office or a parole or probation office may require a person who has been charged with, pled guilty to, or been convicted of an eligible offense involving the abuse of drugs or alcohol to be subject to testing to determine whether alcohol or a controlled substance is present in the person’s body. The program will be available to offenders who are required to participate in the program as ordered by a court or a probation or parole officer as a condition of bond, pretrial release, sentence, probation or parole. Breath testing for alcohol must be done at least twice per day as a condition of the program, and immediate sanctions must be effectively applied if alcohol or controlled substance usage is detected. Testing for controlled substances can be done randomly as often as three times per week. The program also requires that in situations where the Department of Transportation requires a person to install an ignition interlock device as a condition of the person’s license to operate noncommercial motor vehicles, a person must be eligible for a temporary restricted license and must install an ignition interlock device along with participating in the 24/7 program, in jurisdictions where the program is available. Finally, the program will allow testing by an approved alternative method, where twice-a-day testing creates a documented hardship, if such methods and devices have been approved by the Commissioner of Public Safety. The statute also requires the Department to promulgate rules to provide for the nature and manner of testing, including the procedures and apparatus used for testing; to establish a fee structure to pay for the costs of the program; to provide for the acceptance of public and private grants and donations to support the program; to establish a stakeholder group to review and recommend changes to the program; and to establish an application process for jurisdictions that want to participate in the program. The statute further requires the Department to provide a data management system to be used by the Department and all participating jurisdictions for the program. The purposes of the program are focused on highway safety, and specifically on offenders who commit an eligible offense involving alcohol or controlled substances and driving a motor vehicle. Research shows that persons who have committed an eligible offense and who then participate in a sobriety monitoring program that requires twice-a-day testing make changes and better decisions about their use of alcohol or controlled substances before driving a motor vehicle, which results in a lower recidivism rate. These changes will also result in safer roads and healthier employees and families. The program implemented by these rules is not designed or intended as a substitute for an appropriate alcohol or drug treatment program or as a substitute for parole or probation supervision.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on February 14, 2018, as ARC 3628C. A public hearing was held on March 6, 2018, at 10 a.m. in the First Floor Public Conference Room 125, Oran Pape State Office Building, Des Moines, Iowa. Members of the public offered comments at the hearing on the noticed rules, and written comments were also received. The comments included recommendations to consider approving additional testing methodologies that research has shown can also help to maintain sobriety and that additional, more flexible approaches should be considered. Based on the comments received from stakeholders and a review of the noticed rule making by other state agencies that will be using the program, changes were made to the rule making to reflect the input and comments received. The substance and major provisions of the rule making are unchanged. The following list outlines the changes made from the Notice: 1. In rule 661—159.10(901D), at the request of the Department of Corrections (DOC), the words “parole or probation office of the Iowa department of corrections” were removed from the definition of “law enforcement agency.” The DOC will not be administering the 24/7 program, although persons under the DOC’s supervision may be required to participate in the program. 2. Language was changed in subrule 159.11(1) so that the testing is available twice per day at times designated by the local law enforcement agency, rather than literally being available 24 hours per day, which would have created staffing problems for the law enforcement agency or third-party provider. This change was also made in rule 661—159.1(901D). 3. In subrule 159.11(1), changes were made to provide that the law enforcement agency is the designated entity to handle the collection of program fees and administer the program account. 4. In subrule 159.11(2), language was added to clarify that the third-party provider will provide testing services but is not responsible to impose the sanctions or manage the program fee account, which must be done by the law enforcement agency. 5. Language was added in subrule 159.12(1) to reflect that an ignition interlock device (IID) must be installed if required by Iowa Code chapter 321J. This language makes the rule consistent with Iowa Code section 321J.20(10). 6. In subrule 159.20(2), proposed paragraphs “d” through “g” were removed because testing methods must be designated by rule making. New paragraph “d” was added to include the SCRAM® alcohol monitoring and remote breath device as the approved method for testing in cases of hardship. 7. In rule 661—159.30(901D), the fees for each of the approved testing methods are now set forth in the rule, as required by Iowa Code chapter 17A, and language was added to provide that an indigent’s program fees will be paid only to the extent that funds are available. 8. In subrule 159.40(1), language was added so that an application for court-appointed counsel filed in the court case can be used in making a determination of indigency for purposes of the 24/7 program. Changes were also made concerning the process for making a determination of indigency for purposes of the 24/7 program. The law enforcement agency is no longer required to be the agency to make a determination of indigency.Reason for Waiver of Normal Effective Date Pursuant to Iowa Code section 17A.5(2)“b”(1)(b), the Department finds that the normal effective date of this rule making, 35 days after publication, should be waived and the rule making made effective on October 8, 2018, because the statewide sobriety and drug monitoring program will benefit those persons who participate by adding an additional method to help them maintain sobriety and employment. The program will also benefit highway safety by decreasing the number of alcohol- or drug-impaired drivers on the highways and roads.Adoption of Rule Making This rule making was adopted by the Commissioner of Public Safety on August 31, 2018.Fiscal Impact This rule making has no fiscal impact to the State of Iowa. The statute provides that the program fees, including the costs of testing, are paid by the participants or by funds collected from grants, gifts, donations or other program fees that are made available to pay the costs for indigent persons. Jobs Impact After analysis and review of this rule making, no impact on jobs has been found.Waivers Pursuant to the provisions of rule 661—10.222(17A), the Department does not have authority to waive requirements established by statute. 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 provisions of rule 661—10.222(17A), the Department has the authority to grant waivers from the rules.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 8, 2018. The following rule-making action is adopted:

ITEM 1. Adopt the following new 661—Chapter 159: CHAPTER 159STATEWIDE SOBRIETY AND DRUG MONITORING PROGRAM

661—159.1(901D) Program created. The statewide sobriety and drug monitoring program, also referred to as the “24/7 program,” is established in the department of public safety for use by participating jurisdictions. The program shall be available at least twice per day during hours designated by the law enforcement agency, seven days per week in the participating jurisdictions. Participation in or use of the 24/7 program is a voluntary decision of a participating jurisdiction. A participating jurisdiction cannot be required to participate in or to continue to participate in the 24/7 program.

661—159.2() Reserved.

661—159.3() Reserved.

661—159.4() Reserved.

661—159.5() Reserved.

661—159.6() Reserved.

661—159.7() Reserved.

661—159.8() Reserved.

661—159.9() Reserved.

661—159.10(901D) Definitions. The following definitions apply to this chapter: "Alcohol" means an alcoholic beverage as defined in Iowa Code section 321J.1. "Commissioner" means the commissioner of public safety as defined in Iowa Code section 80.1A. "Controlled substance" means the same as defined in Iowa Code section 124.101. "Department" means the department of public safety. "Eligible offense" means a criminal offense in which the abuse of alcohol or a controlled substance was a contributing factor in the commission of the offense, as determined by the court or a governmental entity of the participating jurisdiction. For purposes of operating while intoxicated offenses committed in violation of Iowa Code section 321J.2, “eligible offense” includes only the following offenses:

A first offense in which the person’s alcohol concentration exceeded .15.
A first offense in which an accident resulting in personal injury or property damage occurred.
A first offense in which the person refused to submit to a chemical test requested pursuant to Iowa Code section 321J.6.
A second or subsequent offense.

"Failed test" means any of the following:

A test or combination of tests that shows the presence of alcohol, a controlled substance, a combination of alcohol and one or more controlled substances, or a combination of two or more controlled substances, if any of the controlled substances are not prescribed by a health care provider or are not used in accordance with the health care provider’s written instructions.
A failure or refusal to submit to testing, including but not limited to the nonpayment of the required fee.
Incomplete testing or results that indicate efforts to tamper with or interfere with the test or with valid test results, whether or not those efforts are successful.
Failure to appear to submit to testing.

"Immediate sanction" means a sanction that is applied within minutes of a failed test result. "Law enforcement agency" means a sheriff’s office or city police department that has been approved to administer, implement and enforce the statewide sobriety and drug monitoring program established in Iowa Code chapter 901D for the participating jurisdiction. "Participating jurisdiction" means a county or a city that chooses to participate in the statewide sobriety and drug monitoring program and that has been approved for participation by the department. "Sobriety and drug monitoring program" "24/7 program" means the statewide sobriety and drug monitoring program established in Iowa Code chapter 901D. "Test" "testing" means a procedure or set of procedures performed using equipment, devices and methods approved by the commissioner to determine the presence of alcohol or a controlled substance in a person’s breath or bodily fluid, including blood, urine, saliva, and perspiration, and includes any combination of breath testing, drug patch testing, urine analysis testing, saliva testing, and continuous or transdermal alcohol monitoring. "Timely sanction" means a sanction that is applied within hours or days after a failed test result. A timely sanction shall be applied as soon as possible, but the period between the failed test result and the application of the timely sanction shall not exceed five days.

661—159.11(901D) Participating jurisdiction requirements. 159.11(1) Program requirements. As a participating jurisdiction of the 24/7 program, the participating jurisdiction shall: a. Designate the law enforcement agency or third-party provider that will administer, implement and enforce the 24/7 program. More than one law enforcement agency or third-party provider may be designated. b. Provide one or more locations for testing persons who are participating in the 24/7 program for the presence of alcohol or a controlled substance. c. Ensure that each designated location is available at least twice per day, seven days per week for persons to be tested, during hours designated by the law enforcement agency. d. Ensure that personnel who administer tests and collect bodily specimens for testing at the location have all required training and certifications to use or operate the testing equipment or devices. e. Provide testing equipment and devices. f. Designate the law enforcement agency that will be responsible to collect program fees from persons subject to testing and use program fees to pay for the participating jurisdiction’s costs to administer the program and purchase or maintain testing equipment and devices. g. Provide for and apply immediate sanctions for failed tests. h. Provide for and apply timely sanctions for failed tests. i. Provide test results to the court, prosecutor, and person’s attorney and also provide test results and other required program information to the program data management system. j. Provide for one or more alternative testing methods, if such methods have been approved by the commissioner, in cases of persons for whom testing at least twice per day creates a documented hardship or is geographically impractical. k. Designate the law enforcement agency to establish and maintain a 24/7 program account, place all program fees collected into the account and use the funds in the account only for the purposes of administering and operating the 24/7 program, including but not limited to paying for the services of a third-party provider. The funds in the account shall be considered public funds and shall be subject to the rules and policies of the state auditor’s office. l. Establish a program that is administered by the law enforcement agency to accept public or private grant funds, gifts, or donations and use the funds received to support program activities, including but not limited to the payment of fees for indigent persons. The funds collected under this program shall be deposited and held in the 24/7 program account. m. Provide reports to the department as required. n. Ensure that an audit of the 24/7 program account is conducted at least annually and make the audit report available to the department upon request. o. Maintain sufficient security protocols to protect the personal information of persons subject to testing from unauthorized use. p. Be approved by the department as a participating jurisdiction. 159.11(2) Third-party provider. A participating jurisdiction may designate a third-party provider to provide testing services as described in subrule 159.11(1), except, that the third-party provider shall not provide any of the requirements in paragraphs 159.11(1)“f,” “g,” “h,” “k,” and “l.” The department shall review any third-party provider designated by the participating jurisdiction as a part of the application process. A third-party provider must be approved by the department before providing any service of the 24/7 program. 159.11(3) Application. A county or city that desires to become a participating jurisdiction shall submit an application to the department. The application shall be made on a form provided by the department, which is available at www.dps.state.ia.us/commis/gtsb/index.shtml. The department shall notify the participating jurisdiction whether it has been approved to participate in the 24/7 program. Approval shall be in the sole discretion of the department.

661—159.12(901D) Participant requirements. 159.12(1) Requirements. A person subject to testing in the 24/7 program is required to do all of the following: a. Abstain from all alcohol and controlled substances while enrolled in the program. If a person has been issued a prescription for a controlled substance, the person may participate in the 24/7 program and continue to take the prescribed controlled substance only with the health care provider’s approval and in accordance with the health care provider’s written instructions. b. Submit to testing as required to determine whether alcohol or a controlled substance is present in the person’s body. c. Participate in the 24/7 program when ordered as a condition of bond, pretrial release, sentence, probation, parole, or a temporary restricted license. d. Sign all forms, waivers and releases and provide all required information that is necessary for participation in the program to enable the testing to occur and the test results to be reported, disseminated and used as required by the 24/7 program, including but not limited to providing testing information to the county attorney, person’s attorney, court or parole or probation officer as appropriate. e. Obtain a temporary restricted license when eligible, if the person’s driver’s license is suspended or revoked. f. Install an approved ignition interlock device on all motor vehicles owned or operated by the person if the person’s driver’s license is suspended or revoked or as is otherwise required by Iowa Code section 321J.17, and in any circumstance in which Iowa Code chapter 321J requires the installation of an ignition interlock device, or as ordered by the court pursuant to Iowa Code section 901D.3(2)“b.” g. Pay all program fees, including but not limited to the enrollment fee; the costs of tests, test equipment or test devices; and the costs of installing, activating, monitoring, and deactivating any testing equipment or devices. h. Agree to be subject to immediate sanctions or timely sanctions, as applicable, for noncompliance with the 24/7 program requirements. 159.12(2) Reserved.

661—159.13() Reserved.

661—159.14() Reserved.

661—159.15() Reserved.

661—159.16() Reserved.

661—159.17() Reserved.

661—159.18() Reserved.

661—159.19() Reserved.

661—159.20(901D) Testing. 159.20(1) Methods. The following methods and procedures shall be used to collect samples or perform testing to determine the presence of alcohol or a controlled substance in the person’s breath or bodily fluid. a. Evidentiary breath testing devices and methods as described in rule 661—157.2(321J). b. Preliminary breath screening test devices and methods as described in rule 661—157.5(321J). c. Urine collection methods and equipment as described in rule 661—157.3(321J). d. The SCRAM® continuous alcohol monitoring or remote breath device. 159.20(2) Other devices and methods. Scientifically established tests or methods appropriate to a particular device shall be used in determining whether an alternative device or method meets an acceptable standard for operation, including accuracy. The department may, in its discretion, accept test results from another laboratory. The commissioner may consider all other factors in addition to scientific testing and accuracy, including but not limited to cost, availability, and training in determining whether or not to approve a method or device. Approval of other devices or methods is in the sole discretion of the commissioner.

661—159.21() Reserved.

661—159.22() Reserved.

661—159.23() Reserved.

661—159.24() Reserved.

661—159.25() Reserved.

661—159.26() Reserved.

661—159.27() Reserved.

661—159.28() Reserved.

661—159.29() Reserved.

661—159.30(901D) Program fees. 159.30(1) Enrollment fee. A person subject to testing shall pay an enrollment fee of $30 for each enrollment in the program. A person may be ordered or required to enroll in the program more than once, and the enrollment fee is required for each enrollment. 159.30(2) Fees for tests. a. A person subject to testing shall pay all fees associated with the testing. The following fees are established: (1) For breath test, $2 per test. (2) For a urine test, $6 per test. (3) For a SCRAM® continuous alcohol monitoring or remote breath device, an installation fee of $30 and a fee of $7 per day. b. The law enforcement agency shall inform a person subject to testing of each applicable test fee. 159.30(3) Payment of fees. A person subject to testing shall pay the fee for each test before taking the test. The law enforcement agency may, but shall not be required to, administer the test if the person subject to testing does not pay the fee for the test. For the device(s) approved for use in cases where twice-a-day testing creates a documented hardship or is geographically impracticable, the fee for two weeks’ use of the device shall be paid prior to the installation of the device on the person. The person shall appear at the law enforcement agency a minimum of once per week according to the agency’s instructions for the use of the device and shall pay each week’s fee in advance. Failure to pay the required test fee may subject the person to immediate sanctions or timely sanctions. Community service or other in-kind payment is not authorized as a substitute for payment of the required fees. For a person who has been determined to be indigent or who is only able to pay a portion of the fee, the fees shall be paid from the 24/7 program account to the extent that funds are available.

661—159.31() Reserved.

661—159.32() Reserved.

661—159.33() Reserved.

661—159.34() Reserved.

661—159.35() Reserved.

661—159.36() Reserved.

661—159.37() Reserved.

661—159.38() Reserved.

661—159.39() Reserved.

661—159.40(901D) Fees—indigent participants. A person subject to testing is required to pay the full fee for each test. The fees are established at the minimum level needed to purchase supplies and equipment and to cover the costs of administering the program. 159.40(1) Determination of indigency. A person subject to testing who requests a determination of indigency for purposes of the 24/7 program shall provide all requested financial information. An application for court-appointed counsel may be considered and used in determining whether a person is indigent. A finding of indigency by the court for purposes of determining whether a person should receive court-appointed counsel does not constitute a final determination of indigency for purposes of the 24/7 program. In determining indigency, all relevant information may be considered, including but not limited to income, assets, other sources of support, barter or in-kind payments, and expenditures including but not limited to expenditures for nonessential or luxury items. 159.40(2) Payment of indigent fees. a. If a person subject to testing is determined to be indigent and is reasonably able to pay a portion of the required fee for testing but is not able to pay the full fee amount, the person shall pay only the portion of the fee which the person is reasonably able to pay. The law enforcement agency shall authorize payment of the remaining fee out of the 24/7 program funds, including but not limited to funds received from public or private grants, gifts or donations, if such funds have been received and there are funds remaining after paying the costs for testing supplies and devices and the costs to administer the program. b. If a person subject to testing is determined to be indigent and is not reasonably able to pay any part of the required fee for testing, the law enforcement agency shall authorize the payment of the fee out of the 24/7 program funds, including but not limited to funds received from public or private grants, gifts or donations, if such funds have been received and there are funds remaining after paying the costs for testing supplies and devices and the costs to administer the program. c. The participating jurisdiction, including the designated law enforcement agency or third-party provider, is not required to provide unpaid or free testing at the jurisdiction’s, agency’s or provider’s expense if there are not sufficient funds in the 24/7 program account. The participating jurisdiction or law enforcement agency shall first use the funds in the 24/7 program account to pay for the participating jurisdiction’s costs to administer the program and purchase, rent, or maintain testing equipment and devices and then use any remaining funds to pay fees for indigent participants.

661—159.41() Reserved.

661—159.42() Reserved.

661—159.43() Reserved.

661—159.44() Reserved.

661—159.45() Reserved.

661—159.46() Reserved.

661—159.47() Reserved.

661—159.48() Reserved.

661—159.49() Reserved.

661—159.50(901D) Stakeholder group. The department hereby establishes a stakeholder group for the 24/7 program. The designated stakeholder group for the 24/7 program shall be the Iowa impaired driving coalition. Representatives of other public or private groups may request to be added to the 24/7 program stakeholder group. 159.50(1) Duties. The 24/7 program stakeholder group shall act as an advisory group to the department and the governor’s traffic safety bureau. The stakeholder group shall review the 24/7 program and recommend changes to the governor’s traffic safety bureau. 159.50(2) Meetings. The 24/7 program stakeholder group shall meet as requested by the bureau chief of the governor’s traffic safety bureau. Notice of the stakeholder meetings shall be provided as required by Iowa Code chapter 21. Records of the stakeholder group shall be subject to the provisions of Iowa Code chapter 22.

661—159.51() Reserved.

661—159.52() Reserved.

661—159.53() Reserved.

661—159.54() Reserved.

661—159.55() Reserved.

661—159.56() Reserved.

661—159.57() Reserved.

661—159.58() Reserved.

661—159.59() Reserved.

661—159.60(901D) Grant program established. The department authorizes each participating jurisdiction to create a grant program account for the purpose of accepting public and private grant funds, gifts and donations to support the 24/7 program of the participating jurisdiction. The funds in the account shall be considered public funds and shall be subject to the rules and policies of the state auditor’s office. These rules are intended to implement Iowa Code chapter 901D. [Filed Emergency After Notice 8/31/18, effective 10/8/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4012CHomeland Security and Emergency Management Department[605]Adopted and Filed

Rule making related to hazard mitigation and disaster recovery plan

The Department of Homeland Security and Emergency Management hereby amends Chapter 9, “Iowa Comprehensive Plan,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 17A.3.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 29C.8.Purpose and Summary This rule making formally adopts the Iowa Hazard Mitigation Plan and the Iowa Disaster Recovery Plan. Both plans are reviewed on a regular basis and, when needed, updated versions of the plans are adopted by the Department. The review and public comment period have been completed for both plans, and the Department formally adopted these plans on September 17, 2018. In accordance with federal requirements, each plan will now be reviewed and amended as appropriate at a minimum of every five years.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on June 20, 2018, as ARC 3846C. A public hearing was held on July 10, 2018, at 11 a.m. in the Cyclones Conference Room, Suite 500, 7900 Hickman Road,Windsor Heights, Iowa. No one attended the public hearing. No public comments were received. The Notice of Intended Action listed the projected adoption date for both plans as July 26, 2018. During the plan review conducted by FEMA, FEMA requested to have the adoption date moved to September 17, 2018, so that the adoption of the plans would occur on the same day as the five-year expiration of the prior plan. The Department accommodated that request by making changes from the Notice to set the adoption date for both plans in Items 1 and 2 as September 17, 2018.Adoption of Rule Making This rule making was adopted by the Department on September 5, 2018.Fiscal Impact This rule making has a fiscal impact to the state of Iowa. During times of major disaster as declared by the President, these plans are key to allowing federal recovery and mitigation funds to flow into the state. While the timing and scale of disasters cannot be predicted, these plans provide detail on how efforts and funding in the state will be applied to provide an effective recovery for Iowa. Since 1990, these plans have enabled $2.25 billion in federal recovery and mitigation funds to flow into 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. 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 31, 2018. The following rule-making actions are adopted:

ITEM 1. Amend rule 605—9.3(29C) as follows:

605—9.3(29C) Part B: Iowa Hazard Mitigation Plan. The Part B: Iowa Hazard Mitigation Plan is developed in accordance with Iowa Code section 29C.8, and has been adopted on September 17, 2013September 17, 2018, published, and maintained by the department. Part B details the state government goals, objectives, and strategies to mitigate a wide range of natural, technological or human-caused disasters in accordance with Section 322 of the Stafford Act, 42 U.S.C. 5165.

A copy of Part B will be placed in the state library located in the Ola Babcock Miller Building, 1112 East Grand Avenue, Des Moines, Iowa.
Part B shall be distributed to state agencies and departments that have participated in the writing of the plan or are assigned hazard mitigation functions and to all local emergency management agencies.
The Iowa Hazard Mitigation Plan serves as the state hazard mitigation document and demonstrates the state’s commitment to reduce risks from natural, technological, and human-caused hazards and serves as a guide for the commitment of resources to reducing the effects of natural, technological, and human-caused hazards.
The department updates the plan by amendments promulgated by rule in accordance with Iowa Code chapter 17A and distributes amendments to all plan holders on the department distribution list. Part B shall be reviewed and amended as appropriate at a minimum of every threefive years.
Part B shall be available for public view at the Homeland Security and Emergency Management Department, 7900 Hickman Road, Suite 500, Windsor Heights, Iowa.

ITEM 2. Amend rule 605—9.4(29C) as follows:

605—9.4(29C) Part C: Iowa Disaster Recovery Plan. The Part C: Iowa Disaster Recovery Plan is developed in accordance with Iowa Code section 29C.8, and has been adopted on March 20, 2008September 17, 2018, published, and maintained by the department. Part C details the state government goals, objectives, and strategies to recover from a wide range of natural, technological, or human-caused disasters.

A copy of Part C will be placed in the state library located in the Ola Babcock Miller Building, 1112 East Grand Avenue, Des Moines, Iowa.
Part C shall be distributed to state agencies and departments that have been assigned recovery functions and to all local emergency management agencies.
The Iowa Disaster Recovery Plan serves as the state disaster recovery document.
The department updates the plan by amendments promulgated by rule in accordance with Iowa Code chapter 17A and distributes amendments to all plan holders on the department distribution list. Part C shall be reviewed and amended as appropriate at a minimum of every threefive years.
Part C shall be available for public view at the Homeland Security and Emergency Management Department, 7900 Hickman Road, Suite 500, Windsor Heights, Iowa.

[Filed 9/5/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4013CInspections and Appeals Department[481]Adopted and Filed

Rule making related to social and charitable gambling

The Inspections and Appeals Department hereby rescinds Chapter 100, “Administration,” and adopts a new Chapter 100, “General Provisions for Social and Charitable Gambling,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code sections 10A.104 and 99B.2.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 99B.2.Purpose and Summary The adopted rule making implements changes made to Iowa Code chapter 99B resulting from 2015 Iowa Acts, Senate File 482. The legislation modernized Iowa Code chapter 99B by streamlining processes and eliminating unnecessary licenses. Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on August 1, 2018, as ARC 3919C. No public comments were received. The adopted rule making includes two changes from the Notice. Rule 481—100.6(99B) and subrule 100.11(1) were revised to implement changes made to Iowa Code chapter 99B resulting from 2018 Iowa Acts, Senate File 2333 and House File 2417. These changes were inadvertently left out of the Notice. Senate File 2333 increases the actual retail value of allowable prizes for amusement concessions from $100 to $950. House File 2417 allows a participant in an amusement concession at a fair to make payment by credit card.Adoption of Rule Making This rule making was adopted by the Department on September 5, 2018.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.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 31, 2018. The following rule-making action is adopted:

ITEM 1. Rescind 481—Chapter 100 and adopt the following new chapter in lieu thereof: CHAPTER 100GENERAL PROVISIONS FOR SOCIAL AND CHARITABLE GAMBLING

481—100.1(99B) Definitions. In addition to the definitions found in Iowa Code chapter 99B, and unless specifically defined in 481—Chapters 101 to 107, the following definitions apply to all social and charitable gambling rules. "Bingo supplies and equipment" means a machine, display board, monitor, card, bingo paper, or any other implement or provision used in the conduct of the game of bingo licensed pursuant to Iowa Code chapter 99B. "Director" means the director of the department of inspections and appeals. "Responsible party" means the individual identified on the license application as the contact person. The responsible party is expected to have a general knowledge of Iowa gambling laws and rules. This individual is deemed to be an agent of the organization until the department is notified otherwise in writing.

481—100.2(99B) Licensure. Gambling shall only occur upon receipt of a license issued by the department. The license shall be prominently displayed at the gambling location. 100.2(1) Types of gambling licenses—qualified organizations. A qualified organization (QO), as defined in Iowa Code section 99B.1(26), may apply for the six following license types, each of which permits the activities listed. A QO with a two-year QO license may also apply for a seventh license type, a very large raffle license.License type/Activity typeTwo-year QOOne-year QO180-day QO90-day QO14-day QOBingo at a fair or festivalBingoThree occasions per week; 15 occasions per monthNoNoNoTwo occasionsOne occasion per day for length of fair or festivalGames of skill and chanceUnlimited carnival-style gamesNoNoNoUnlimited carnival-style gamesNoGame nightOne per calendar yearOne per calendar yearOne per calendar yearOne per calendar yearOne per calendar yearNoVery small and small rafflesUnlimitedUnlimitedUnlimitedUnlimitedUnlimitedNoLarge rafflesOne per calendar yearEight per license period, each conducted in a different countyOne per calendar yearOne per calendar yearOne per calendar yearNoVery large rafflesOne per calendar year, requires additional very large raffle licenseOne per calendar year, requires additional very large raffle licenseNoNoNoNoElectronic rafflesOne small raffle per day; one large raffle per calendar yearNoNoNoNoNo 100.2(2) Other types of gambling licenses. There are four other types of gambling licenses: a. One-year license for an amusement concession. b. Two-year license for social gambling in beer and liquor establishments. c. Two-year license for social gambling in public places. d. Annual license for manufacturers and distributors of bingo equipment and supplies or electronic raffle systems. 100.2(3) Political action committees ineligible. Political action committees are not qualified organizations as defined in Iowa Code section 99B.1(26) and are not eligible for gambling licenses.

481—100.3(99B) License application. 100.3(1) Applications. Applications may be completed online or downloaded by visiting dia.iowa.gov and clicking on the link for “Social and Charitable Gambling.” A paper application may be requested from the Social and Charitable Gambling Unit, Iowa Department of Inspections and Appeals, Lucas State Office Building, Des Moines, Iowa 50319-0083; or by calling (515)281-6848. 100.3(2) Receipt of application. An application shall be submitted at least 30 days before the beginning date requested. 100.3(3) Fees. License fees are not refundable. 100.3(4) Documentation. Qualified organizations applying for a charitable gambling license must submit with the application documentation, as described in the application, to prove tax-exempt status. 100.3(5) Application for incorrect license. If the applicant does not apply for the appropriate license, the license fee may be applied to the appropriate license within 30 days of notification to the applicant by the department. For example, the applicant applies for a 90-day qualified organization license but wishes to conduct bingo. The fee for the 90-day qualified organization license may be applied to a two-year or 14-day qualified organization license, if the applicant responds within 30 days of notification by the department. 100.3(6) Incomplete application submitted. If the applicant submits an incomplete application, the application may be completed and submitted within 30 days of notification to the applicant by the department without forfeiting the fee submitted with the incomplete application.

481—100.4(99B) Additional requirements for licensure. In addition to requirements for licensure found in Iowa Code chapter 99B, the department may use the following standards to determine whether to issue a gambling license. These standards do not apply to licensure of manufacturers or distributors of bingo equipment and supplies or electronic raffle equipment. 100.4(1) Sales tax permit—exemptions. Qualified organizations shall either possess or have made application for a sales tax permit at the time the license application is submitted. The following gambling activities are exempt from sales and local option taxes: a. Gambling activities conducted by county and city governments. b. Gambling activities held by the Iowa state fair, Iowa state fair authority, or Iowa state fair foundation (organized under Iowa Code chapter 173), including gambling activities that occur outside of the annual scheduled fair event. c. Gambling activities held by a fair (as defined in Iowa Code section 174.1(2)), including gambling activities that occur outside of scheduled fair events. d. Raffles held by a licensed qualified organization at a fair as defined in Iowa Code section 99B.1 and pursuant to the requirements specified in Iowa Code section 99B.24. e. Raffles, whether or not they are conducted at a fair event, where the proceeds are used to provide educational scholarships by a qualifying organization representing veterans as defined in Iowa Code section 99B.27(1)“b.” 100.4(2) State tax liabilities. The applicant must have no outstanding state tax liabilities or, if there are outstanding state tax liabilities, the applicant must have entered into a negotiated repayment plan with the department of revenue and be current in all payments pursuant to the plan. A copy of the repayment plan shall be submitted with the licensure application. 100.4(3) Revocation—no license issued. a. No one involved in an organization with a gambling license revocation action pending will be granted a license similar to the license revoked. b. No one with a gambling license currently under revocation may be issued any gambling license during the period of revocation. c. A license will not be issued if there is a current revocation of either a gambling or a liquor license for the location named on the license application. 100.4(4) Criminal violations. No applicant shall have been convicted of or pled guilty to a criminal violation of Iowa gambling law. 100.4(5) Violations of gambling law or Iowa alcoholic beverage control Act. Violation of gambling law or the Iowa alcoholic beverage control Act affects whether a gambling license is issued. a. The applicant may have no more than two convictions of or guilty pleas to serious or aggravated misdemeanors in the last two years. This includes any combination of serious or aggravated misdemeanors. b. No liquor license shall have been suspended within the last 12 months because of a conviction of or guilty plea to a criminal violation of the Iowa alcoholic beverage control Act (Iowa Code chapter 123). c. No liquor license shall have been revoked because of a conviction of or guilty plea to a criminal violation of the Iowa alcoholic beverage control Act. d. No applicant shall have been convicted of a felony, federal or state, within five years of the date of the application. For felony convictions more than five years prior to the date of the application, citizenship rights must have been restored in order for the application to be considered.

481—100.5(99B) Returned checks. If a check intended to pay for any license provided for under Iowa Code chapter 99B is not honored for payment by the bank on which the check is drafted, the department will attempt to redeem the check. The department will notify the applicant of the need to provide sufficient payment. An additional fee of $25 shall be assessed for each dishonored check. If the department does not receive cash to replace the check, no license will be issued.

481—100.6(99B) Payment systems. Licensees allowing participants to make payment by debit card, as authorized by Iowa Code section 99B.5, shall ensure that payment systems comply with all applicable federal and state laws regarding payment card processing and the protection of personal information. Licensees conducting amusement concessions at a fair and allowing participants to make payment by credit card, as authorized by 2018 Iowa Acts, House File 2417, section 1, shall ensure that payment systems comply with all applicable federal and state laws regarding payment card processing and the protection of personal information.

481—100.7(99B) Participation—game of skill, game of chance or raffle. No one who conducts a game of skill, game of chance or raffle may participate in the game or raffle. For purposes of this rule, an individual “conducts” a raffle if the individual directly participates in the mechanism of selection of the prize, such as drawing the winning entry. For purposes of this rule, an individual “conducts” a game of skill or game of chance if, for example, the person is a dealer or a croupier or otherwise operates the game.

481—100.8(99B) Posted rules—games other than bingo and raffles. Rules established by the licensee shall be posted on a sign near the front of the playing area or made available electronically at each player’s location. Rules shall be in large, easily readable print and shall include:

The name and mailing address of the licensee;
Prices to play;
How winners will be determined;
Prize(s) or categories of prizes for each game; and
Rules established by the licensee for the game. Rules shall define a game and indicate the cost per game. For example, a game might be one opportunity to shoot and make one basket, or three opportunities to shoot and make one basket.

481—100.9(99B) Posted rules—bingo. Requirements for posted bingo rules are found in rule 481—103.5(99B).

481—100.10(99B) Rules—raffles. A copy of the rules for a raffle shall be available upon request. 100.10(1) The rules shall include the following: a. Methods of awarding a prize; b. Prices to play, including discounts; and c. Whether a sufficient number of entries must be sold in order for the raffle to occur, or if an alternate prize is offered when sales of entries are insufficient. 100.10(2) A licensed qualified organization may also include in its rules items such as the policy for nonpayment of prizes.

481—100.11(99B) Prizes. Prizes are governed by the following standards. 100.11(1) Amusement concession licensees. The maximum prize limit for games of skill, games of chance and bingo is $950 in merchandise. 100.11(2) Qualified organizations. The following table provides prize limits for types of gambling conducted by qualified organizations.Type of gamblingPrize limitsGames of skill and games of chance$10,000 in merchandiseVery small raffleCumulative value of cash prizes is $1,000 or less; or purchased merchandise is $1,000 or less; or donated merchandise is $5,000 or lessSmall raffleCumulative value of all cash and prizes is more than $1,000 but not more than $10,000Large raffleCumulative value of cash and prizes is more than $10,000 but not more than $100,000Very large raffleCumulative value of cash and prizes is more than $100,000 but not more than $200,000; or the prize is real propertySingle bingo gameUp to $250 cash or merchandiseBingo jackpot$1,000 cash or merchandise maximum on first jackpot in 24-hour period; $2,500 cash or merchandise maximum on second jackpot in 24-hour period (see Iowa Code section 99B.21(2)“d”) 100.11(3) Annual game night. An individual shall not spend more than $250 for entrance fees and wagers. Cash and merchandise may be awarded in an aggregate amount not to exceed $10,000. No participant shall win more than a total of $5,000.

481—100.12(99B) Games of chance—prohibited games. Slot machines are unlawful for all licenses issued under Iowa Code chapter 99B. Other than during an annual game night, games in the following list are unlawful:

Punchboard,
Pushcard,
Pull-tab,
Craps,
Chuck-a-luck,
Roulette,
Klondike,
Blackjack,
Baccarat,
Equality, or
Three-card monte.

481—100.13(99B) Records. In addition to requirements found in Iowa Code section 99B.16, the following requirements apply. Gambling records, maintained separately from all other records, shall be kept current. 100.13(1) Disbursement journal. Records of expenses and dedicated and distributed money are required. a. A disbursement journal shall include the date of expenditure, the name of the payee, a description of the purpose of payment, the amount of payment, and the method of payment (check, electronic fund transfer, etc.). b. The disbursement journal shall clearly indicate dedication as the purpose for expenditure of dedicated funds. 100.13(2) Supporting documentation—time requirements. Supporting documentation such as invoices or bills shall be kept for three years.

481—100.14(99B) Reports. A licensed qualified organization shall submit an annual report to the department by January 31 of each year for the prior calendar year period of January 1 through December 31. A report shall be submitted even if no gambling activity occurred during the reporting period. Reports may be completed online by visiting dia.iowa.gov and clicking on the link for “Social and Charitable Gambling.” A paper version of the annual gambling report may be obtained from the Social and Charitable Gambling Unit, Iowa Department of Inspections and Appeals, Lucas State Office Building, Des Moines, Iowa 50319-0083; or by telephone (515)281-6848. When the due date is on Saturday, Sunday, or a legal holiday, the report is due the next business day.

481—100.15(10A,17A,99B) Appeal rights. Any decision of the department may be appealed in accordance with procedures set out in 481—Chapter 10 and Iowa Code chapter 17A. When an appeal is received, the status of the license is governed by the following: 100.15(1) Denial of untimely or insufficient renewal application. If a renewal application is not timely or sufficient, a license may not be issued until a final decision is issued and all appeal rights have been exhausted. 100.15(2) Denial of timely and sufficient renewal application. If a renewal application is timely and sufficient but is denied by the department, a license remains effective until a final decision is issued and all appeal rights have been exhausted. 100.15(3) Denial of new application. If a new application is denied, no license may be issued until a final decision is issued and all appeal rights have been exhausted.

481—100.16(99B) Raffles. The following apply to all raffles, including electronic raffles. 100.16(1) Timing. A valid raffle shall only occur during the period of the license. The license must be in effect before promotions for the raffle can begin. The gambling event begins when the first entry is sold and ends when winning numbers are drawn. Calendar raffles and build-up or pyramid raffles are prohibited. If an organization obtains a temporary license to conduct a raffle, the entirety of the raffle, including promotion, sale of entries and drawing, must fall within the time period for the temporary license. 100.16(2) Raffle entries—sales. Any price may be charged for a raffle entry. Raffle entries shall not be sold online. Raffle entries shall not be sold outside the state of Iowa. Organizations shall comply with United States Postal Service regulations restricting the sale of raffle entries through the mail. 100.16(3) Raffle entries—discount. A licensee may offer raffle entries for sale at a discounted rate if the discount is applied in a nondiscriminatory manner. a. Examples.Selling one entry for $5 or five entries for $20 is acceptable. The amount paid for entries may not be determined by a characteristic of the person purchasing entries, such as height, weight or wingspan. b. Promotion and availability of discount.The discount must be available to all persons throughout the duration of the raffle and must be posted on all promotional material. 100.16(4) Winners. Raffle winners cannot be required to be present to win. a. The date by which the prize shall be claimed shall be no fewer than 14 days following the drawing. b. If the prize is not claimed, the licensed qualified organization may do one of the following: (1) Continue to draw until a winner claims the prize. Each drawing must allow the time period specified in paragraph 100.16(4)“a” for claiming the prize. (2) Donate the unclaimed prize to another qualified organization to be used for an educational, civic, public, charitable, patriotic, or religious use. 100.16(5) Prizes. If a prize is merchandise, its value shall be determined by the purchase price paid by the organization or donor. The prize may be a single item or several items.

481—100.17(99B) Expenses. Reasonable expenses shall not exceed 40 percent of the net receipts. 100.17(1) Proof of expense. No expense item shall be allowed without a proper receipt, paid invoice or canceled check and shall not be paid from an outside source. The burden of proof is on the licensee to show that all expenses were incurred exclusively and directly as a result of the gambling activity. An expense will not be considered reasonable if the amount charged significantly exceeds the prevailing rate or average retail cost of the item or service purchased. 100.17(2) Allowed expenses. Expenses allowed within the 40 percent limit are: a. The license fee; b. Rent of building or equipment; c. Taxes (other than state and local sales tax paid on gross receipts); d. Promotion expense; e. Major equipment purchases; f. Overhead expenses; g. Worker compensation; and h. Other expenses incurred exclusively and directly as a result of the gambling activity.

481—100.18(99B) Net receipts. At least 60 percent of net receipts shall be dedicated and distributed to educational, civic, public, charitable, patriotic, or religious uses. 100.18(1) Examples. The following examples illustrate methods to determine net receipts, allowable expenses, and the amount requested to be dedicated and distributed. a. Example 1.When sales tax is not included in gross receipts, sales tax need not be deducted to arrive at net receipts.Gross receipts (excluding sales tax)$100,000Amount awarded as prizes$20,000Net receipts$80,000Minimum dedicated and distributed (60% of net receipts)$48,000Maximum expenses (40% of net receipts)$32,000 b. Example 2.When sales tax is included in gross receipts, it is deducted to arrive at net receipts.Gross receipts (including sales tax)$107,000Amount awarded as prizes$20,000Sales tax (7%)$7,000Net receipts$80,000Minimum dedicated and distributed (60% of net receipts)$48,000Maximum expenses (40% of net receipts)$32,000 100.18(2) Time for distribution. Net receipts received during the calendar year shall be distributed no later than 30 days following the end of each calendar year unless permission to do otherwise is requested in writing and granted by the department.

481—100.19(99B) Licensure of manufacturers and distributors of bingo equipment and supplies and electronic raffle systems. A manufacturer or distributor of bingo equipment and supplies and electronic raffle systems, as defined in Iowa Code section 99B.32, shall obtain a license prior to conducting business within the State of Iowa. 100.19(1) Duration of license. The license is issued for a one-year period. 100.19(2) Application. To obtain a license, the applicant shall complete an application for a license and submit a $1,000 fee. a. The applicant shall comply with the requirements of Iowa Code chapter 99B, administrative rules of the department and other applicable state or federal laws. b. The department may require detailed information concerning the business structure and operation of the applicant, including but not limited to the following: (1) All owners, officers and board members of the business. (2) All names under which the applicant will conduct business in the state of Iowa. 100.19(3) Manufacturers and distributors of electronic raffle systems—additional requirements. A manufacturer or distributor of electronic raffle systems must meet the following additional requirements in order to obtain a license. a. Approval of certifying entity by the department.In addition to licensure, manufacturers and distributors of electronic raffle systems must be certified by an entity approved by the department. “Approved by the department,” for purposes of this subrule, means that the entity has submitted its qualifications in writing to the director for review and has received approval in writing by the director or the director’s designee. b. Certification—requirements.Entities approved by the department to certify manufacturers and distributors of electronic raffle systems shall ensure all electronic raffle systems meet the requirements of Iowa Code section 99B.25 and rule 481—100.20(99B). c. Review of contracts—notification.The applicant shall submit to the department for review at the time of application the base contract intended for use with qualified organizations. For the duration of the license, the licensee shall notify the department each time the licensee enters into a contract with a qualified organization by submitting in writing the name of the qualified organization and the duration of the contract. The required notification will allow the department to verify that the qualified organization holds a valid two-year qualified organization license, which permits the conduct of an electronic raffle.

481—100.20(99B) Bingo supplies and equipment. Products sold within this state to a gambling license holder shall meet the following requirements: 100.20(1) Products must be manufactured and sold by an Iowa-licensed manufacturer or distributor. 100.20(2) Products shall be supplies and equipment used in connection with the game of bingo as defined in Iowa Code section 99B.1. The following are noninclusive characteristics of the game of bingo to which products must conform: a. Cards or playing faces shall have spaces marked in horizontal and vertical rows. Each space shall be designated by number, letter, symbol, or picture, or a combination of numbers, letters, symbols, or pictures. b. Balls or objects used to select spaces which are to be covered on the card or playing face must bear numbers, letters, symbols, or pictures, or a combination of numbers, letters, symbols, or pictures corresponding to the system used for designating the spaces. c. The bingo machine must contain a receptacle where objects or balls are placed and from which the objects or balls representing the space to be covered are selected. The selection of the balls or objects by the bingo machine must be by chance and may be either manual or mechanical. 100.20(3) Bingo cards sold in Iowa must have the manufacturer’s name imprinted on the cards.

481—100.21(99B) Electronic raffles. In addition to the requirements found in Iowa Code section 99B.25, the following apply to electronic raffles: 100.21(1) An electronic raffle shall be conducted in a fair and honest manner. 100.21(2) All entries shall be included in the drawing. 100.21(3) The sale of raffle entries and the drawing of the winning entry shall take place within the same calendar day.

481—100.22(99B) Social gambling. Social gambling requirements are located in Iowa Code sections 99B.41 to 99B.45. These rules are intended to implement Iowa Code chapter 99B. [Filed 9/5/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4014CInspections and Appeals Department[481]Adopted and Filed

Rule making related to bingo

The Inspections and Appeals Department hereby amends Chapter 103, “Bingo,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code sections 10A.104 and 99B.2.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 99B.2.Purpose and Summary The adopted rule making implements changes made to Iowa Code chapter 99B resulting from 2015 Iowa Acts, Senate File 482. The legislation modernized Iowa Code chapter 99B by streamlining processes and eliminating unnecessary licenses. Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on August 1, 2018, as ARC 3920C. 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 5, 2018.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.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 31, 2018. The following rule-making actions are adopted:

ITEM 1. Rescind rule 481—103.1(10A,99B) and adopt the following new rule in lieu thereof:

481—103.1(99B) Definitions. In addition to definitions found in Iowa Code chapter 99B and in rule 481—100.1(99B), the following definitions apply to all qualified organizations where bingo is played. "Cash" means any legal tender of the United States. "Category" means the name given to a particular type of playing face to distinguish one from another. "Limited license" means a 14-day license issued only to a qualified organization. There are no limits on the number of games played or occasions held, except that only two bingo occasions may be held during the period of 14 days, with no limit on the number of bingo games or the number of hours played during each designated bingo day. "Playing face" means the grid on which a player marks numbers and letters called as the game progresses.

ITEM 2. Rescind rule 481—103.2(10A,99B) and adopt the following new rule in lieu thereof:

481—103.2(99B) License. 103.2(1) License required—exception. A license is required in order to conduct a bingo occasion unless all of the following requirements are met: a. Participants in the bingo occasion are not charged to enter the premises where bingo is conducted. b. Participants in the bingo occasion are not charged to play. c. Any prize awarded at the bingo occasion is donated. d. The bingo occasion is conducted as an activity and not for fundraising purposes. 103.2(2) Location. Bingo occasions are restricted to the location for which application is made by the qualified organization and approved by the department. For good cause, a license may be transferred to a different location only after written notice by the licensee and approval by the department. “Good cause,” for purposes of this subrule, may include flood, fire or other natural disasters; sale of the building; or nonrenewal of lease. 103.2(3) Application. Before any organization may conduct bingo, a license application must be approved by the department. Application and license requirements are found in rules 481—100.3(99B), 481—100.4(99B), and 481—100.5(99B). 103.2(4) Examples. The following are examples of circumstances affecting whether a license is granted. a. Qualified organization X applies for and is issued a two-year license to conduct bingo occasions at 313 Cherry Street, Des Moines, Iowa. The license is effective from August 1, 2017, to July 31, 2019. On October 1, 2017, qualified organization Y applies for a 14-day limited license to conduct bingo at the same location. The license is approved and issued because a limited license can be issued for the same location used for a two-year bingo license. b. Qualified organization ABC applies for and is issued a two-year qualified organization license to conduct bingo at 1002 West 2nd Avenue in Jones Town, Iowa. The license is effective from October 1, 2017, to September 30, 2019. On November 15, 2017, qualified organization EFG applies for a two-year qualified organization license for the same location. A license may be issued to organization EFG for the same location during the same period to conduct any games of chance, games of skill or raffles. Organization EFG shall not conduct bingo at the location. c. Hometown Community School applies for and is issued a two-year qualified organization license to conduct games of skill, games of chance and raffles at the grade school building. The license is effective from September 1, 2017, to August 31, 2019. During the time that the Hometown Community School license is in effect, the school-sponsored pep club applies for a 14-day limited license to conduct games of skill at the grade school building. The school-sponsored pep club may be issued a limited license for the same location during the same time. Under this example, the school-sponsored pep club would not be required to obtain a separate license, because school-affiliated organizations may operate separate events under a school’s two-year license.

ITEM 3. Rescind rule 481—103.3(99B) and adopt the following new rule in lieu thereof:

481—103.3(99B) Bingo occasion. A qualified organization may conduct only 3 bingo occasions per week, but not more than 15 occasions per month, under a two-year qualified organization license. A week starts on Sunday and ends on Saturday. At the end of each occasion, the person conducting the games shall announce both the gross receipts and the use to which the net receipts will be dedicated and distributed.

ITEM 4. Amend rule 481—103.4(99B), introductory paragraph, as follows:

481—103.4(99B) Game of bingo. Each game shall meet all of the requirements of the definition of “bingo” in Iowa Code section 99B.1(5)99B.1(4) to be a legal game of bingo. Games ordinarily considered bingo may be played.

ITEM 5. Amend paragraph 103.4(1)"f" as follows: f. House rulesRules established by the licensee may require that a player have the last number called for a bingo. If not posted in the house rulesestablished by the licensee, the player is not required to have the last number called.

ITEM 6. Amend subrule 103.4(3) as follows: 103.4(3) The cost to play each game shall not exceed $5. Cards or games may be sold only within the premises of the bingo occasion. The cost for each packet, playing face, or tear sheet shall be the same for each participant, i.e., the cost for an opportunity to play shall be equal. Players may pay for games with cash or, at the option of the licensee, checks, personal check, money order, bank check, cashier’s check, electronic check, or debit card. a. All cards or games shall be assigned a price. b. The price shall be posted. Cards may be sold only for the posted price. c. Free games shall not be given. Free games include gift cards redeemable for games. This paragraph does not prohibit giving free concession items such as food, beverages or daubers. d. Bingo games allowing for a trade-in of a bingo card during a bingo game for not more than fifty cents per trade-in may be allowed.

ITEM 7. Rescind the implementation sentence in rule 481—103.4(99B).

ITEM 8. Amend rule 481—103.5(99B) as follows:

481—103.5(99B) Staterules and house rulesestablished by the licensee. Iowa administrative rules and specific house rulesestablished by the licensee must be readily available to every bingo player. The house has discretion regarding reserved seating and age restrictions for children to play, but must post such restrictions in the house rules. 103.5(1) A copy of these rules, 481—Chapter 103, “Bingo,” shall be maintained at every bingo location during every bingo occasion. Bingo players who request it shall have the opportunity to read the administrative rules. 103.5(2) House rulesRules established by the licensee shall be posted on a sign near the front of the playing area. a. The sign shall be at least 30 inches by 30 inches. b. Permanent letters 3 inches high shall proclaim “Rules of the Game.” c. a. Rules shall be in large, easily readable print and shall include: (1) The name and mailing address of the licensee; (2) Prices to play; and (3) House rulesRules established by the licensee for the game. 1b. House rulesRules established by the licensee shall include how to indicate “bingo” to halt the game,how to collect a prize, andhow the licensee will verify winners’ names and addresses.

Reserved seating may be observed if the house so chooses and posts the information.
People of any age are allowed to play bingo. The house may choose to restrict children of certain ages, as long as the restriction is posted in the house rules.

c. Rules established by the licensee may include rules related to reserved seating and age restrictions for children to play. 103.5(3) The following information shall be correctly posted before the beginning of each bingo occasion and shall not be changed after the bingo occasion begins: a. Description of each game to be played; b. Price of each game; c. Prize for each game or method for determining the prize for each game; and d. Jackpot rules, if any. This rule is intended to implement Iowa Code section 99B.1(24).

ITEM 9. Amend rule 481—103.6(99B), introductory paragraph, as follows:

481—103.6(99B) Prizes. Cash or merchandise prizes awarded for each game shall not exceed $100$250 in value. Jackpot games are excepted and are governed by standards in subrule 103.6(5). Theexact amount of the prize shall be announced before the beginning of each game.

ITEM 10. Amend subrule 103.6(2) as follows: 103.6(2) Prizes awarded in games with more than one winner shall be shared equally. It is permissible to round up or down, provided doing so does not exceed the maximum payout for that particular game.

ITEM 11. Amend subrule 103.6(4) as follows: 103.6(4) A player shall not be required to return cash or a merchandise prize won in one game in order to play a subsequent game. Players shall not be required to play in one game in order to play in a subsequent game.

ITEM 12. Amend paragraph 103.6(5)"b" as follows: b. The jackpot starting prize shall not exceed $300$500 in cash or actual retail value of merchandise.

ITEM 13. Amend paragraph 103.6(5)"e" as follows: e. If a jackpot is not won in the specified number of calls, the game reverts to a regular game with a prize of $100$250 or less.

ITEM 14. Amend paragraph 103.6(5)"f" as follows: f. Each jackpot game shall begin again at no more than $300$500.

ITEM 15. Amend rule 481—103.6(99B), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 99B.7(1), 99B.21, 422.16 and 717D.2.

ITEM 16. Amend rule 481—103.7(10A,99B) as follows:

481—103.7(10A,99B) Workers. 103.7(1) Each organization must have a responsible party listed on the application. The responsible party must be an active member of the organization and should be familiar with the requirements of the Iowa law and be aware of the bingo activities of the organization. 103.7(2) Volunteers must be actively participating members of the licensed organization or must participate in an organization to which money will be dedicated. 103.7(3) Rescinded IAB 7/24/02, effective 7/5/02. 103.(4) 103.7(3) Paid workers shall not play during a bingo occasion in which they work. Persons conducting bingo shall not play during any bingo occasion conducted by the qualified organization for which they work. A person conducting bingo includes: persons overseeing the bingo games, persons controlling and accounting for the bingo occasion’s net receipts, persons directing the work of bingo workers, and any persons having management or oversight responsibilities. 103.(5) 103.7(4) The following people shall not work during a bingo occasion:a. The lessor of the building; orA person receiving rent for a bingo location, either directly or indirectly, shall not be involved in, participate in, or be associated with the operation of bingo games. 103.() 103.7(5) b. Anyone who sells bingo equipment or supplies to thata bingo licenseeshall not work for that licensee during a bingo occasion. This rule is intended to implement Iowa Code section 99B.7(1)“b.”

ITEM 17. Amend rule 481—103.8(99B), introductory paragraph, as follows:

481—103.8(99B) Expenses. Expenses incurred exclusively and directly as a result of bingo shall not exceed 2540 percent of net receipts. Reasonable expenses within the 2540 percent limit are:

ITEM 18. Rescind the implementation sentence in rule 481—103.8(99B).

ITEM 19. Amend rule 481—103.9(99B) as follows:

481—103.9(99B) Location. Bingo occasions may be conducted on premises either owned or leased by the qualified organization.

All buildings in which bingo occasions are conducted must meet state or local standards for occupancy and safety.
The name of the licensee shall be posted on the sign of each building or location where bingo occasions are held.
A name which is closely associated with the licensee and which clearly identifies the lawful uses of the proceeds may also be used. Generic-type names, such as “Nelson Street Bingo” or “Uncle Bob’s Bingo,” shall not be used.
The rent shall not be related to nor be a percentage of the receipts.
The licensee may terminate any lease or rental agreement without paying a penalty or forfeiting money or a deposit. Damage deposit money is excepted.
Alcoholic beverages may be served in a bingo location if that location possesses a beer permit or liquor license.
The lessor of the building shall not participate in conducting bingo.
During a bingo occasion, the lessor shall not sell any beverage, food or any other merchandise in the room in which bingo is played.
Only one licensedqualified organization may holdconduct bingo occasions at a locationwithin the same structure or building. However, the following exception applies: A 14-day limited licensee may hold bingo occasions at the same location.

This rule is intended to implement Iowa Code section 99B.7.

ITEM 20. Rescind the implementation sentence in rule 481—103.12(10A,99B).

ITEM 21. Rescind subrule 103.13(3) and adopt the following new subrule in lieu thereof: 103.13(3) Records of expenses and dedicated and distributed money are required. a. The following information shall be retained for all payments: (1) Date of payment. (2) Payee. (3) Amount of payment. (4) Purpose of payment. b. For checks, the purpose of payment shall be recorded on the memo line of the check.

ITEM 22. Rescind the implementation sentence in rule 481—103.13(99B).

ITEM 23. Amend rule 481—103.14(10A,99B) as follows:

481—103.14(10A,99B) Bingo checking account. A qualified organization whose bingo occasions exceed $10,000 in annual gross receipts shall maintain a separate bingo checking account. The checking account shall be established within one day of attaining $10,000. 103.14(1) Bingo receipts, less the amount awarded as cash prizes, shall be deposited in the bingo checking account on the same or the next business day after the occasion. Other funds shall not be deposited in the bingo account. Interest earned on deposits in a bingo checking or savings account shall be treated the same as proceeds of bingo occasions.Exception: Limited funds of the organization may be deposited to pay initial or unexpected emergency expenses. The amount of nonbingo funds deposited in the bingo account shall not exceed $7500. Records shall be kept which identify this money. 103.14(2) Funds from bingo accounts shall be withdrawn by check. Checks shall be preprinted. a. The following information shall be printed on the face of the check: (1) Organization name, (2) Consecutive numbers, (3) The words “bingo account,” and (4) The organization’s gambling license number.The nature of the payment is to be written on the face of each check or share draft as it is drawn. Each check shall be made payable to a person or an organization and be signed by an authorized representative of the licensee. A check shall not be made payable to “cash,” “bearer,” or any fictitious payee. Table G**See forms at end of this chapter. shows a sample check. b. All checks, including void and voided checks, shall be kept and accounted for. 103.14(3) Checks may be drawn on the bingo account for only the following purposes: a. To pay necessary and reasonable expenses incurred in connection with bingo. Wages must be paid by check. b. To disburse net proceeds of bingo for qualified purposes as required by law. c. To transfer proceeds from a bingo checking account to a bingo savings account pending disbursement for a qualified purpose. d. To withdraw initial or emergency funds deposited in the account. e. To pay prizes. 103.14(2) Payments shall be paid from the bingo account in accordance with the requirements of Iowa Code section 99B.21. Wages shall not be paid by cash. 103.(4) 103.14(3) A check shall be drawn on theThe bingo account inshall be used for both of the following events: a. One qualified organization satisfies the dedication requirement by donating funds to another organization over which the licensed organization has no control; or b. A qualified organization licensee is satisfying the dedication requirement by spending funds to further the charitable, educational, religious, public, patriotic or civic purposes of its own organization. 103.(5) 103.14(4) A qualified organization licensee shall not transfer funds from the bingo checking account to any other checking account of the organization.A flowchart for a bingo checking account is shown on Table H*. This rule is intended to implement Iowa Code sections 99B.2(3) and 99B.7(1)“p.”

ITEM 24. Rescind the implementation sentence in rule 481—103.15(10A,99B).

ITEM 25. Amend rule 481—103.16(10A,99B) as follows:

481—103.16(10A,99B) ReportsAnnual gambling reports. 103.16(1) Each organization which conducts bingo shall submit a report of all transactions for each fiscal year. The fiscal year begins July 1 and ends June 30 of the following yearto the department by January 31 of each year for the prior calendar year period of January 1 through December 31.When the due date is on Saturday, Sunday, or a legal holiday, the report is due the next business day. 103.16(2) Annual gambling reports may be completed online by visiting http://dia.iowa.gov/dia.iowa.gov and clicking onthe link for “Social and Charitable Gambling.” A paper version of the annual gambling report may be obtained from the Social and Charitable Gambling Unit, Iowa Department of Inspections and Appeals, Lucas State Office Building, Des Moines, Iowa 50319-0083; or by telephone (515)281-6840(515)281-6848. 103.16(3) Reports are due 30 days after the end of the fiscal year. When the due date is on Saturday, Sunday, or a legal holiday, the report is due the next business day. 103.(4) 103.16(3) The department may require a qualified organization to submit records of specific occasions with the annual report. 103.(5) 103.16(4) All transactions of any school group or parent support group using a schoolwide license shall be on the annual report. This rule is intended to implement Iowa Code sections 99B.2(4) and 99B.16.

ITEM 26. Rescind the implementation sentence in rule 481—103.17(10A,99B).

ITEM 27. Rescind rule 481—103.18(10A,99B).

ITEM 28. Renumber rule 481—103.19(99B) as 481—103.18(99B).

ITEM 29. Amend renumbered subrule 103.18(1) as follows: 103.18(1) A qualified organization may lease electronic bingo equipment from a manufacturer or distributor licensed by the department. For purposes of this rule, “electronic bingo equipment” means an electronic device that aidsassists an individual with a disability in the use of a bingo card during a bingo game.

ITEM 30. Amend renumbered rule 481—103.18(99B), implementation sentence, as follows: This rule is intended to implement Iowa Code section 99B.7(8)“b.”99B.21(3)“b.”

ITEM 31. Adopt the following new rule 481—103.19(99B):

481—103.19(99B) Bingo at a fair or community festival. Bingo may lawfully be conducted at a fair or a community festival if the requirements of Iowa Code section 99B.22 are met. A qualified organization that has received permission from the sponsor of the fair or community festival to conduct bingo shall be licensed under Iowa Code section 99B.12.

ITEM 32. Adopt the following new implementation sentence in 481—Chapter 103: These rules are intended to implement Iowa Code sections 99B.1 to 99B.7, 99B.11 to 99B.16, 99B.21 to 99B.23, and 99B.32.

ITEM 33. Rescind and reserve 481—Chapter 103, Table E.

ITEM 34. Rescind and reserve 481—Chapter 103, Table G. [Filed 9/5/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4015CInspections and Appeals Department[481]Adopted and Filed

Rule making related to amusement devices

The Inspections and Appeals Department hereby amends Chapter 104, “General Provisions for All Amusement Devices,” and Chapter 105, “Registered Amusement Devices,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code sections 10A.104, 99B.2 and 99B.52(7).State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 99B.2.Purpose and Summary The adopted rule making implements changes made to Iowa Code chapter 99B, “Social and Charitable Gaming,” resulting from 2015 Iowa Acts, Senate File 482. The legislation modernized Iowa Code chapter 99B by streamlining processes and eliminating unnecessary licenses.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on August 1, 2018, as ARC 3922C. 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 5, 2018.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.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 31, 2018. The following rule-making actions are adopted:

ITEM 1. Amend rule 481—104.1(10A,99B), definitions of “Amusement device” and “Gambling device,” as follows: "Amusement device" means an electrical or mechanical device possessed and used in accordance with Iowa Code section 99B.10chapter 99B. An amusement device is not a game of skill or chance as defined in Iowa Code section 99B.1, a gambling device, or a device that plays poker, blackjack, or keno. Roulette wheels, slot machines, and other devices specified in Iowa Code section 725.9 as gambling devices are not amusement devices. "Gambling device" means a device possessed or used or designed to be used for gambling and includes, but is not limited to: , roulette wheels, klondike tables, punchboards, faro layouts, keno layouts, numbers tickets, slot machines,pachislo skill-stop machine or any other similar machine or device, push cards, jar tickets, pull-tabs, and video machines or other devices that do not comply with Iowa Code section 99B.10chapter 99B.

ITEM 2. Adopt the following new definition of “Progressive games” in rule 481—104.1(10A,99B): "Progressive games" means games in which the value of the prizes increases an incremental amount with each game.

ITEM 3. Amend rule 481—104.2(99B) as follows:

481—104.2(99B) Device restrictions. An amusement device, except for an amusement device which shall be registered pursuant to Iowa Code section 99B.10(1)“f,”99B.53, may be owned, possessed, or offered for use by any person at any location. All amusement devices shall comply with all of the following:

The device must be electrical, which includes both electronic and video, or mechanical, or a combination of both.
The device shall not be designed or adapted to issue or pay coins or currency.
The device may be designed or adapted to award free games without additional consideration.
The device may be designed or adapted to award merchandise or tickets or tokens redeemable for merchandise not to exceed a retail value of more than $50 per play or game.
The device may be designed or adapted to issue tickets or tokens, but not coins or currency. However, the device shall not be designed or adapted to issue tickets or tokens that may be used to play any device or game.
The device shall not have a “knock-off” switch to release either free games or credits awarded by the device. However, credits may be released by the insertion of coins, currency, or tokens to activate a new game. Free games may only be utilized for playing the device and may not be released in any other manner.
The device shall not be capable of being altered to enable a person using the device to increase or decrease the chances to win a game or other prize by paying more than is ordinarily required to play the game.
The device must be designed or adapted to accept only coins, currency, or tokens to play the game. However, the device shall not be designed or adapted to accept tokens that have been awarded as a prize.
The device must be registered if it meets the registration requirements set forth inIowa Code section 99B.53 and rule 481—104.5(99B).

ITEM 4. Amend rule 481—104.3(99B) as follows:

481—104.3(99B) Prohibited games/devices. The following games or devices are not permitted:

Devices that pay coins or currency.
Gambling games permitted in Iowa Code chapter 99F, such as slot machines and roulette wheels, or any similar device.
Any machine that does not conform to the requirements in these rules or Iowa Code section 99B.10chapter 99B.
Any machine designed or resembling a machine which is normally used for casino-type gambling.
Amusement devices designed or adapted to facilitate gambling.

Progressive games.

Note: This rule does not prohibit the possession of antique slot machines when possessed pursuant to Iowa Code chapter 725.

ITEM 5. Amend rule 481—104.5(99B) as follows:

481—104.5(99B) Registration. An amusement device must be registered if it meets the registration requirements set forth in Iowa Code section 99B.10(1)“f.”99B.53. The outcome of the game is not primarily determined by the skill or knowledge of the operator, and registration is required if chance plays a role equal to or greater than the players’ skill or knowledge in determining the outcome of the game. Additional licenses or registrations under Iowa Code chapter 99B are not required.

ITEM 6. Amend rule 481—104.6(99B) as follows:

481—104.6(99B) Violations. Failure to comply with the limitations imposed on the use and possession of amusement devices in Iowa Code section 99B.10 as amended by 2007 Iowa Acts, Senate File 510, section 2,chapter 99B constitutes unlawful gambling, which may result in the following consequences. Additional consequences apply for registered amusement devices pursuant to 481—Chapter 105 and Iowa Code section 99B.10 as amended by 2007 Iowa Acts, Senate File 510, section 2chapter 99B.

Conviction for illegal gambling under the provisions of Iowa Code chapter 725.
Forfeiture of property under the provisions of Iowa Code chapter 809.

ITEM 7. Adopt the following new rule 481—104.7(99B,17A):

481—104.7(99B,17A) Declaratory orders. In addition to the requirements for declaratory orders found in 481—Chapter 3, parties seeking a declaratory order shall file with their petition a written evaluation of the game by an independent gaming laboratory approved by the department. 104.7(1) Approved by the department. “Approved by the department,” for purposes of this rule, means that the gaming laboratory has submitted its qualifications in writing to the director for review and approval in writing by the director or the director’s designee. 104.7(2) Written evaluation—requirements. The independent gaming laboratory’s evaluation must analyze whether chance plays a role equal to or greater than the players’ skill or knowledge in determining the outcome of the game. “Outcome of the game” includes both whether the player correctly solves the puzzle and what prize is awarded.

ITEM 8. Amend 481—Chapter 104, implementation sentence, as follows: These rules are intended to implement Iowa Code section 99B.10sections 99B.1, 99B.2 and 99B.51 to 99B.60.

ITEM 9. Rescind the definitions of “Manufacturer’s representative” and “Organization” in rule 481—105.1(10A,99B).

ITEM 10. Amend rule 481—105.1(10A,99B), definitions of “Distributor,” “Manufacturer,” “Owner,” “Registered amusement device” and “Responsible party,” as follows: "Distributor" means, for the purposes of Iowa Code sections 99B.10, 99B.10A, and 99B.10B, any person who owns electrical or mechanical amusement devices that are registered as provided in Iowa Code section 99B.10(4) and that are offered for use at more than a single location or premisesis as defined in Iowa Code section 99B.51. "Manufacturer" means, for the purposes of Iowa Code sections 99B.10, 99B.10A, and 99B.10B, any person engaged in business in this state that originally produces an electrical or mechanical amusement device required to be registered under Iowa Code section 99B.10(4) or produces individual components for use in such a deviceis as defined in Iowa Code section 99B.51. "Owner" means, for the purposes of Iowa Code sections 99B.10A and 99B.10B, any person that owns an operable registered electrical or mechanical amusement device. An owner that operates for profit is allowed up to two machines at a single location. An owner that meets the requirements of Iowa Code section 99B.7(1)“m” is allowed up to four machines at a single locationis as defined in Iowa Code section 99B.51. "Registered amusement device" means an electrical or mechanical amusement device in operation subject to registration by the department pursuant to Iowa Code section 99B.10(1)“f”99B.53 and includes both the external and internal components. Any change in the registered amusement device, including the external and internal components of the registered amusement device, constitutes a new registered amusement device for which registration by the owner is required. The word “change” as used herein does not include repairs or replacement of parts that do not change or alter the operation of the device as originally registered by the owner. If the repairs or replacement parts alter the operation of the device as originally registered, then the device must be reregistered before it is made available for operation. "Responsible party," as listed on the amusement device registration, means the owner of the amusement device(s)device.

ITEM 11. Amend subrule 105.2(6) as follows: 105.2(6) The registered amusement device shall be registered in accordance with these rules and shall comply with all of the requirements of Iowa Code section 99B.1099B.53, this chapter, 481—Chapter 104, and any other applicable laws or rules.

ITEM 12. Amend subrule 105.2(8) as follows: 105.2(8) If the department, or the department’s designee, determines that a registered amusement device is not in compliance with the requirements of this chapter or any other provision of Iowa law, the device may be subject to seizure, and any registration associated with the device, including the registration of the manufacturer, manufacturer’s representative, distributor, or owner, may be revoked or suspended.

ITEM 13. Adopt the following new subrule 105.2(15): 105.2(15) Devices shall not allow for more than one player. Each playing position constitutes one amusement device.

ITEM 14. Amend rule 481—105.5(99B), introductory paragraph, as follows:

481—105.5(99B) Registration by a manufacturer, manufacturer’s representative, distributor, or an owner that operates for profit. A person engaged in business in Iowa as a manufacturer, a manufacturer’s representative, a distributor, or an owner that operates for profit shall be registered with the department prior to engaging in business in Iowa. A person shall register under each of the categories that apply to the business to be conducted in Iowa and shall pay the designated fee for each category of registration.

ITEM 15. Amend subrule 105.5(1) as follows: 105.5(1) Each person that registers with the department shall pay an annual registration fee as follows: a. For a manufacturer or manufacturer’s representative, $2,500. b. For a distributor, $5,000. c. For an owner of no more than twofour registered amusement devices at a single location or premises that is not an organization that meets the requirements of Iowa Code section 99B.7(1)“m,”a qualified organization, $2,500.

ITEM 16. Amend rule 481—105.6(99B), introductory paragraph, as follows:

481—105.6(99B) Registration of registered amusement devices. Each owner of an amusement device subject to registration by the department pursuant to Iowa Code section 99B.10(4)99B.53 shall obtain a registration. A registration issued pursuant to Iowa Code chapter 99B is required to offer a registered amusement device for use.

ITEM 17. Amend subrule 105.6(3) as follows: 105.6(3) Anew registered amusement device must be obtained from a manufacturer, a manufacturer’s representative or a distributorthat is registered with the department pursuant to Iowa Code section 99B.56. A registered amusement device that has been placed on location and used may be obtained from a manufacturer, distributor or owner that is registered with the department pursuant to Iowa Code section 99B.10A99B.56.A distributor or owner that ceases, for any reason, to be registered pursuant to Iowa Code section 99B.56 may sell any registered amusement devices in the distributor’s or owner’s possession within 12 months from the date registration ceases. For new machinesall amusement devices new to the purchaser, proof of purchase, which includes the seller’s name, company name, and address, must accompany the application for registration of the machine.The owner of the registered amusement device shall exercise due diligence in ensuring that the amusement device is in compliance with these rules and all laws governing such devices. Upon request by the department or the department’s designee, any manufacturer, manufacturer’s representative or distributor registered with the department, or any owner of a registered device, shall permit the inspection of any amusement device and shall make available for inspection all records, documents, and agreements pertaining to the amusement device.

ITEM 18. Amend subrule 105.6(4) as follows: 105.6(4) An organization that meets the requirements of Iowa Code section 99B.7(1)“m” shall not permit or offer for use more than four registered amusement devices at any single premises. Organizations that meet the Iowa Code section 99B.7(1)“m” requirements under Section 501(c) of the Internal Revenue Code shall provide a copy of the exemption approval letter from the Internal Revenue Service. All other persons shall not permit or offer for use more than two registered amusement devices at any single premises. The single premises where the registered amusement device(s) is located shall have a Class “A,” Class “B,” Class “C,” special Class “C,” or Class “D” liquor control license or a Class “B” or a Class “C” beer permit issued pursuant to Iowa Code chapter 123. New registrations shall not be issued to devices to be located at premises with Class “B” or Class “C” beer permits.No more than four registered amusement devices shall be permitted or offered for use at any single premises. a. A registered amusement device may be located on premises for which a class “A,” class “B,” class “C,” special class “C,” or class “D” liquor control license has been issued pursuant to Iowa Code chapter 123. b. A registered amusement device may be located on the premises for which a class “B” or class “C” beer permit has been issued pursuant to Iowa Code chapter 123, but new registrations shall not be issued to devices to be located at premises with class “B” or class “C” beer permits. (1) A registered amusement device at a location for which only a class “B” or class “C” beer permit has been issued pursuant to Iowa Code chapter 123 may only be relocated to a location for which a class “A,” class “B,” class “C,” special class “C,” or class “D” liquor license has been issued and shall not be transferred, assigned, sold or leased to another person for which only a class “B” or class “C” beer permit has been issued pursuant to Iowa Code chapter 123. (2) If ownership of the location changes, the class “B” or class “C” beer permit does not lapse and the registered amusement device is not removed from the location, the device may remain at the location.

ITEM 19. Amend subrule 105.6(5), introductory paragraph, as follows: 105.6(5) Each electrical or mechanical amusement device required to be registered pursuant to Iowa Code section 99B.1099B.53 shall include on the amusement device a counting mechanism.

ITEM 20. Rescind subrule 105.6(6) and adopt the following new subrule in lieu thereof: 105.6(6) The owner of the registered amusement device shall exercise due diligence in ensuring that the amusement device is in compliance with these rules and all laws governing such devices. Upon request by the department or the department’s designee, any manufacturer or distributor registered with the department, or any owner of a registered device, shall permit the inspection of any amusement device and shall make available for inspection all records, documents, and agreements pertaining to the amusement device.

ITEM 21. Amend rule 481—105.7(99B) as follows:

481—105.7(99B) Violations. Failure to comply with the limitations imposed on the use and possession of registered amusement devices in Iowa Code chapter 99B may result in the following:

Conviction for illegal gambling may result under the provisions of Iowa Code chapter 725.
Suspension or revocation of a wine or beer permit or of a liquor license may result under the provisions of Iowa Code chapter 123.
Property may be forfeited under the provisions of Iowa Code chapter 809.
Violation of any laws pertaining to gambling may result in suspension or revocation of a registration as prescribed in Iowa Code section 99B.10B or 99B.10C99B.55.
Unless otherwise prescribed in Iowa Code section 99B.10B or 99B.10C99B.55, a registration may be revoked upon the violation of any gambling law, rule or regulation, including Iowa Code chapter 99B, 481—Chapter 104, or this chapter.
A registration may be revoked if the registrant or an agent of the registrant engages in any act or omission that would have permitted the department to refuse to issue a registration under Iowa Code chapter 99B.
A person under the age of 21 shall not participate in the operation of an electrical or mechanical amusement devicethat is required to be registered. A person who violates the provisions of Iowa Code section 99B.10C(1)99B.57 commits a scheduled violation under Iowa Code section 805.8C(4).

ITEM 22. Amend rule 481—105.9(10A,99B,82GA,SF510), parenthetical implementation statute, as follows:

481—105.9(10A,99B,82GA,SF510) Procedure for denial, revocation, or suspension of a registration.

ITEM 23. Amend subrule 105.11(1), introductory paragraph, as follows: 105.11(1) The department shall consider the following factors in determining whether to approve or deny an application for registration of an amusement device, a manufacturer, a distributor,or an owner, or a manufacturer’s representative:

ITEM 24. Amend paragraph 105.11(1)"a" as follows: a. The applicant and responsible person’s history of compliance with Iowa Code sections 99B.10, 99B.10A and 99B.10B99B.51 to 99B.60 and with other gambling laws and rules.

ITEM 25. Amend 481—Chapter 105, implementation sentence, as follows: These rules are intended to implement Iowa Code sections 99B.10, 99B.10A, 99B.10B, and 99B.10C99B.1, 99B.2 and 99B.51 to 99B.60. [Filed 9/5/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4016CInspections and Appeals Department[481]Adopted and Filed

Rule making related to card game tournaments

The Inspections and Appeals Department hereby rescinds Chapter 106, “Card Game Tournaments by Veterans Organizations,” Iowa Administrative Code, and adopts a new Chapter 106 with the same title.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code sections 10A.104 and 99B.2.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 99B.2.Purpose and Summary The adopted rule making implements changes made to Iowa Code chapter 99B resulting from 2015 Iowa Acts, Senate File 482. The legislation modernized Iowa Code chapter 99B by streamlining processes and eliminating unnecessary licenses. Iowa Code section 99B.27 addresses much of what was formerly found in Chapter 106; accordingly, the rule making eliminates duplicative material. Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on August 1, 2018, as ARC 3921C. 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 5, 2018.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.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 31, 2018. The following rule-making action is adopted:

ITEM 1. Rescind 481—Chapter 106 and adopt the following new chapter in lieu thereof: CHAPTER 106CARD GAME TOURNAMENTS BY VETERANS ORGANIZATIONS

481—106.1(99B) Definitions. In addition to definitions found in Iowa Code chapter 99B, for the purposes of this chapter, the following definitions apply: "Card game tournament" "tournament" means a series of card games held by a licensee during a consecutive period of time of not more than 24 hours and not held as part of an annual game night licensed pursuant to Iowa Code section 99B.26. "Department" means the department of inspections and appeals. "Educational, civic, public, charitable, patriotic, or religious uses" means the same as defined in Iowa Code section 99B.1(14). "Licensee" means a qualified organization representing veterans that has been issued a license pursuant to Iowa Code section 99B.12 and the rules in 481—Chapter 100 and this chapter.

481—106.2(99B) Licensing. Before any card game tournament may occur, a license application must be approved by the department. Application and license requirements are found in rules 481—100.3(99B), 481—100.4(99B), and 481—100.5(99B). A qualified organization intending to conduct veterans card game tournaments must complete the section of the license application for veterans card game tournaments.

481—106.3(99B) Card game tournament. In addition to the requirements found in Iowa Code section 99B.27, licensees conducting tournaments shall comply with all of the following: 106.3(1) Licensee to conduct tournament. The licensee shall conduct each tournament and shall not contract with or permit another person to conduct the tournament or any card game during the tournament. 106.3(2) Tournament rules. Tournament rules shall be posted or distributed to all participants before the tournament begins. Rules shall include the following: a. Card games and the rules of each card game; b. Participation fees; c. Prize(s) for each card game and tournament; d. How winners will be determined; and e. Any other tournament rules.

481—106.4(99B) Records. The licensee shall comply with the record-keeping requirements found in Iowa Code sections 99B.16 and 99B.27(3) and 481—Chapter 100. The licensee shall keep a journal of all dates of events, amount of gross receipts, amount given out as prizes, expenses, amount collected for taxes, and amount collected as revenue. These rules are intended to implement Iowa Code sections 99B.2 and 99B.27. [Filed 9/5/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4011CInterior Design Examining Board[193G]Adopted and Filed

Rule making related to registration and continuing education

The Interior Design Examining Board hereby amends Chapter 2, “Registration,” and Chapter 3, “Continuing Education,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 544C.3.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code chapter 544C.Purpose and Summary The rules in Chapter 2 describe the process for registration. The amendments to Chapter 2 clarify the continuing education requirements for reinstatement of registration and list the fee for a formal wall certificate in the fee section. The rules in Chapter 3 describe licensees’ continuing education requirement as a condition of registration renewal. The amendments to Chapter 3 rescind the definition of “self-directed activity” as the term is no longer used and modify the number of continuing education hours required.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on June 20, 2018, as ARC 3841C. A public hearing was held on July 10, 2018, at 9 a.m. at the Board office, Suite 350, 200 E. Grand Avenue, Des Moines, Iowa. One person attended the public hearing but did not offer comments. 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 6, 2018.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 193—Chapter 5. 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 31, 2018. The following rule-making actions are adopted:

ITEM 1. Amend subrule 2.2(1) as follows: 2.2(1) It is the policy of the board to mailsend to each registrant at the registrant’s last-known address a notice of the pending expiration date approximately one month prior to the date the certificate of registration is scheduled to expire. Failure to receive this notice does not relieve the registrant of the responsibility to timely renew the certificate and pay the renewal fee.

ITEM 2. Amend rule 193G—2.3(544C,17A) as follows:

193G—2.3(544C,17A) Reinstatement of certificates of registration. An individual may reinstate a lapsed certificate of registration to active registration by doing the following:

Paying the current renewal fee;
Paying the reinstatement fee of $100;
Providing a written statement outlining the professional activities that the applicant performed in Iowa during the period of nonregistration. The statement shall include a list of all projects with which the applicant had involvement and shall explain the service provided by the applicant; and
Submitting documented evidence of completion of 5 contact hours of continuing education for each year or partial year since the registrant’s last renewal year in active status with a maximum of 20 contact hours.10 continuing education hours, which should have been reported on the June 30 renewal date on which the applicant failed to renew, and 5 continuing education hours for each year or portion of a year of expired registration up to a maximum of 20 continuing education hours. All continuing education hours must be completed in health, safety, and welfare subjects; be acquired in structured educational activities; and be in compliance with requirements in 193G—Chapter 3. The continuing education hours used for reinstatement may not be used again at the next renewal and shall not have been earned more than four years prior to the date of the application to reinstate.

ITEM 3. Amend rule 193G—2.4(544C) as follows:

193G—2.4(544C) Applications. Persons applying for initial, renewal, or reciprocal registration shall submit an application on a form provided by the board and shall pay a registration fee of $275. Certificates issued to registrants with last names beginning with A through K shall expire on June 30 of even-numbered years, and certificates issued to registrants with last names beginning with L through Z shall expire on June 30 of odd-numbered years. An applicant applying for initial, reciprocal, or reinstatement registration within 12 months from the applicant’s required renewal date shall pay half of the required fee. An applicant applying for initial, reciprocal, or reinstatement registration more than 12 months from the applicant’s required renewal date shall pay the full registration fee.Type of feeAmountInitial registration fee$275Reciprocal registration fee$275Formal wall certificate$50Renewal$275Late renewal fee$25Reinstatement of lapsed registration $100

ITEM 4. Rescind the definition of “Self-directed activity” in rule 193G—3.1(17A,272C,544C).

ITEM 5. Amend subrule 3.2(3) as follows: 3.2(3) A registered interior designer who holds a registration in Iowa for less than 12 months from the date of initial registration shall not be required to report continuing education at the first registration renewal. A registered interior designer who holds a registration in Iowa for more than 12 months, but less than 24 months from the date of initial registration, shall be required to report 65 contact hours (with a minimum of 4 contact hours in HSW subjects in a structured activity), earned in the preceding 12 months at the first registration renewal. [Filed 8/24/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4037CIowa Finance Authority[265]Adopted and Filed

Rule making related to qualified allocation plans

The Iowa Finance Authority hereby amends Chapter 12, “Low-Income Housing Tax Credits,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 16.5.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 16.35 and Section 42 of the Internal Revenue Code.Purpose and Summary The updated 2019 9% Qualified Allocation Plan and the 4% Qualified Allocation Plan (QAPs) dated September 5, 2018, set forth the purposes of the plans, administrative information required for participation, threshold criteria, selection criteria, postreservation requirements, appeal process, and compliance monitoring components. The plans also establish the fees for filing an application for low-income housing tax credits and for compliance monitoring. Copies of the qualified allocation plans are available upon request from the Authority and are available electronically on the Authority’s website at www.iowafinanceauthority.gov. It is the Authority’s intent to incorporate the updated QAPs by reference consistent with Iowa Code chapter 17A and 265—subrules 17.4(2) and 17.12(2).Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on August 1, 2018, as ARC 3917C. A public hearing was held on August 21, 2018, at 9 a.m. at the Authority offices, 2015 Grand Avenue, Des Moines, Iowa. Comments on the QAPs received at the public hearing included comments on the timing of the due date of the application for the 9% QAP, set-aside issues, the requirement that 50 percent of the developer fee above $750,000 be deferred, and a perception that income averaging is discouraged by the QAPs. Written comments received about the QAPs were similar to the comments made at the public hearing. The only changes from the amendments published under Notice were made in rules 265—12.1(16) and 265—12.2(16) and reflect a change in the date subsequent to which no amendments or additions to the QAPs are included and no modifications or amendments to the Internal Revenue Code are incorporated by reference. The date proposed in the Notice was July 11, 2018, and that date has been changed to September 5, 2018. In addition, in response to public comments about the QAPs, the Authority made certain changes to the QAPs based on those comments. For example, among other changes, the timing of the application was revised to allow more time between the final adoption of the QAP and the application deadline, and the requirement that 50 percent of the developer fee above $750,000 be deferred was removed. Additionally, based on public comments, a Disaster Relief Set-Aside was added, and the prohibition against building in a 100-year flood plain was eased, as long as certain criteria are met.Adoption of Rule Making This rule making was adopted by the Authority on September 5, 2018.Fiscal Impact The fees that will be increased will result in an estimated additional $18,500 in revenue for the Authority. Due to fluctuations in requests and the lack of historical data, the estimated fiscal impact of the new fees on the increase in revenue for the Authority is unknown. Jobs Impact After analysis and review of this rule making, the impact on jobs is expected to be consistent with the impact of previous years’ QAPs. The Low-Income Housing Tax Credit program has a substantial positive impact on job creation in Iowa, with many jobs created annually in the construction, finance, and property management fields, among others.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.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 31, 2018. The following rule-making actions are adopted:

ITEM 1. Amend rule 265—12.1(16) as follows:

265—12.1(16) Qualified allocation plans. 12.1(1) Four percent qualified allocation plan. The qualified allocation plan entitled Iowa Finance Authority Low-Income Housing Tax Credit Program 4% Qualified Allocation Plan (“4% QAP”) dated September 7, 2016September 5, 2018, shall be the qualified allocation plan for the allocation of 4 percent low-income housing tax credits consistent with IRC Section 42 and the applicable Treasury regulations and Iowa Code section 16.35. The 4% QAP is incorporated by reference pursuant to Iowa Code section 17A.6 and 265—subrules 17.4(2) and 17.12(2). The 4% QAP does not include any amendments or editions created subsequent to September 7, 2016September 5, 2018. 12.1(2) Nine percent qualified allocation plan. The qualified allocation plan entitled Iowa Finance Authority Low-Income Housing Tax Credit Program 20182019 Qualified Allocation Plan (“9% QAP”) shall be the qualified allocation plan for the allocation of 9 percent low-income housing tax credits consistent with IRC Section 42 and the applicable Treasury regulations and Iowa Code section 16.35. The 9% QAP is incorporated by reference pursuant to Iowa Code section 17A.6 and 265—subrules 17.4(2) and 17.12(2). The 9% QAP does not include any amendments or editions created subsequent to September 6, 2017September 5, 2018.

ITEM 2. Amend rule 265—12.2(16) as follows:

265—12.2(16) Location of copies of the plans. 12.2(1) 4% QAP. The 4% QAP can be reviewed and copied in its entirety on the authority’s Web sitewebsite at http://www.iowafinanceauthority.govwww.iowafinanceauthority.gov. Copies of the 4% QAP, application, and all related attachments and exhibits shall be deposited with the administrative rules coordinator and at the state law library and shall be available on the authority’s Web sitewebsite. The 4% QAP incorporates by reference IRC Section 42 and the regulations in effect as of September 7, 2016September 5, 2018. Additionally, the 4% QAP incorporates by reference Iowa Code section 16.35. These documents are available from the state law library, and information about these statutes, regulations and rules is on the authority’s Web sitewebsite. 12.2(2) 9% QAP. The 9% QAP can be reviewed and copied in its entirety on the authority’s Web sitewebsite at http://www.iowafinanceauthority.govwww.iowafinanceauthority.gov. Copies of the 9% QAP, application, and all related attachments and exhibits shall be deposited with the administrative rules coordinator and at the state law library and shall be available on the authority’s Web sitewebsite. The 9% QAP incorporates by reference IRC Section 42 and the regulations in effect as of September 6, 2017September 5, 2018. Additionally, the 9% QAP incorporates by reference Iowa Code section 16.35. These documents are available from the state law library, and information about these statutes, regulations and rules is on the authority’s Web sitewebsite. [Filed 9/6/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4038CIowa Finance Authority[265]Adopted and Filed

Rule making related to home and community-based services rent subsidy program

The Iowa Finance Authority hereby amends Chapter 24, “Home and Community-Based Services Rent Subsidy Program,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code section 16.5.State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 16.55.Purpose and Summary The purposes of these amendments are to clarify the rules, remove an unnecessary defined term, and strike a sentence that prohibits subsidy recipients from residing in rental units owned by immediate family members.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on August 1, 2018, as ARC 3916C. No public comments were received. No changes from the Notice have been made.Adoption of Rule Making This rule making was adopted by the Authority Board of Directors on September 5, 2018.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.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 31, 2018. The following rule-making actions are adopted:

ITEM 1. Rescind the definition of “Immediate family member” in rule 265—24.2(16).

ITEM 2. Amend rule 265—24.2(16), definition of “Qualified rental unit,” as follows: "Qualified rental unit" means a housing unit for which a signed written rental agreement exists and which is governed by Iowa Code chapter 562A. A qualified rental unit does not include a home owned by an immediate family member.

ITEM 3. Amend rule 265—24.3(16) as follows:

265—24.3(16) Eligibility requirements. All of the following criteria shall be met. 24.3(1) Demonstrated need. An applicant must demonstrate need for rent subsidy by meeting all of the following requirements: a. The applicant shall provide a copy of an executed rental agreement showing the applicant as a tenant, with signatures by the landlord and the applicant or the applicant’s legal guardian; b. The applicant shall provide evidence that the applicant pays more than 30 percent of the applicant’s gross income for rent, with a minimum contribution of $25 per month; c. The applicant shall not receive any other permanent rental assistance; d. The applicant may not use this program to substitute for any other permanent rent subsidy that the applicant had been receiving at the time of or immediately prior to the time of application to this program; and e. The applicant’s rental unitmust be a qualified rental unit and may not be owned by someone who lives in the unit. 24.3(2) Ineligible for other rent subsidies. The applicant shall have been determined ineligible or be on the waiting list, or provide documentation that the waiting list is closed, under the HUD Housing Choice Voucher (HCV) program administered by Iowa’s public housing authorities. In the event that the HCV waiting list is currently closed, the applicant is responsible for monitoring the status of the waiting list application period and must apply at the first available opportunity and provide documentation of HCV application submission to the local public housing authority or be subject to removal from the HCBS rent subsidy program or the HCBS rent subsidy program waiting list.

ITEM 4. Amend 265—Chapter 24, implementation sentence, as follows: These rules are intended to implement Iowa Code section 16.5(17) and 2005 Iowa Acts, House File 825, section 4516.55. [Filed 9/6/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.ARC 4017CSecretary of State[721]Adopted and Filed

Rule making related to post-election audit

The Secretary of State hereby amends Chapter 26, “Counting Votes,” Iowa Administrative Code.Legal Authority for Rule Making This rule making is adopted under the authority provided in Iowa Code sections 17A.4 and 50.51 [2017 Iowa Acts, House File 516, section 43].State or Federal Law Implemented This rule making implements, in whole or in part, Iowa Code section 50.51.Purpose and Summary The Secretary of State has determined that as a result of the enactment of 2017 Iowa Acts, House File 516, these amendments are necessary to keep administrative rules in compliance with the Iowa Code. House File 516 makes significant changes to elections in the state of Iowa, creating a need to update Chapter 26, which pertains to elections.Public Comment and Changes to Rule Making Notice of Intended Action for this rule making was published in the Iowa Administrative Bulletin on August 1, 2018, as ARC 3915C. The Secretary of State received comments and questions following the publication of the Notice of Intended Action. The comments can be summarized into four categories:

Change the deadline for completion of post-election audit so that it aligns with the deadline to request an administrative recount.
Better define who is eligible to serve on the audit board.
Provide auditors with more flexibility on how many members an audit board may have.
Provide auditors with more flexibility on how many ballots to count in an absentee and special voters precinct.

One commenter requested that the Secretary of State select 5 percent of precincts statewide as an alternative to selecting one precinct per county. In response to the comments received, the Secretary of State has made the following changes to the rules on post-election audits:

Audits must be completed not later than 12:00 noon three days after the county canvass of votes. This deadline gives auditors the afternoon to file a request with their board of supervisors if the auditors believe an administrative recount is necessary.
Additional language was added regarding who can serve on the audit board. Auditors now have the flexibility to expand boards past five members if they deem it necessary.
Added language to clarify that all ballots cast at a precinct polling place must be audited.
Added language regarding the supervision of the handling of ballots to protect ballots from alteration, damage, or loss.
Added language to clarify that an auditor may expand the number of ballots audited past 2,000 in an absentee and special voters precinct.

Adoption of Rule Making This rule making was adopted by the Secretary of State on September 5, 2018.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 Secretary of State for a waiver of the discretionary provisions, if any, pursuant to 721—Chapter 10.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 31, 2018. The following rule-making actions are adopted:

ITEM 1. Reserve rules 721—26.108 to 721—26.199.

ITEM 2. Adopt the following new 721—Chapter 721—Chapter Part VI:PART VI—POST-ELECTION AUDIT

ITEM 3. Adopt the following new rule 721—26.200(50):

721—26.200(50) Precinct selection. 26.200(1) One precinct per county shall be selected by lot. 26.200(2) For the purpose of this rule, combined precincts established pursuant to Iowa Code section 49.11 shall be audited as a single precinct if selected by lot; therefore, if one precinct out of the combined precinct is selected, all of the precincts that make up the combined precinct shall be audited. 26.200(3) Absentee and special voters precincts, established pursuant to Iowa Code section 53.20, shall be included in the list of precincts to be selected for each county to be selected by lot.

ITEM 4. Adopt the following new rule 721—26.201(50):

721—26.201(50) State commissioner duties. 26.201(1) The state commissioner of elections shall select by lot the precincts to be included in the post-election audit the day following the election. 26.201(2) The state commissioner shall notify the state chairpersons of the two political parties whose candidates received the highest number of votes statewide for either the office of President of the United States or governor in the preceding general election, of the time and location of the selection at least 24 hours prior to the selection. A public notice shall be posted on the state commissioner’s website. 26.201(3) The state commissioner shall notify the commissioners of all precincts selected for an audit following a statewide election. 26.201(4) In advance of any other election, the state commissioner may order an audit of the election in the manner provided for in Iowa Code section 50.51. In the event an audit is ordered, the state commissioner of elections shall notify all commissioners holding an election no less than 24 hours before the election in question that an audit has been ordered. An audit ordered under Iowa Code section 50.51 and rule 721—26.200(50) shall be conducted using the same time frame and procedure as a general election audit.

ITEM 5. Adopt the following new rule 721—26.202(50):

721—26.202(50) Post-election audit time frame. 26.202(1) A post-election audit shall be completed not later than 12:00 noon three days after the county canvass of votes. 26.202(2) At least 24 hours prior to the audit start time, commissioners shall post the time and location of each audit. 26.202(3) A representative selected by each of the two political parties whose candidates received the highest number of votes statewide in the preceding general election shall be invited to observe the hand count. The commissioner shall notify the county chairperson of each political party a minimum of two days before the hand count of the time and place of the hand count. 26.202(4) If an invited representative does not appear at the hand count, the commissioner shall notify the state commissioner.

ITEM 6. Adopt the following new rule 721—26.203(50):

721—26.203(50) Audit board and audit procedure. 26.203(1) The commissioner shall appoint the members of the audit board not less than 24 hours prior to the time of the scheduled audit. a. Audit board members shall be registered voters of the county. b. The audit board shall ordinarily consist of three or five members. At the commissioner’s discretion, additional members may be appointed. A sufficient number of members shall be appointed to ensure the audit is completed not later than 12:00 noon three days after the county canvass of votes. c. Not more than a simple majority of the members of the audit board shall be members of the same political party or organization if one or more registered voters of another political party or organization are qualified and willing to serve on the audit board. d. For all elections in which a partisan office is on the ballot, the audit board shall include members of the two political parties whose candidates for President of the United States or for governor, as the case may be, received the largest and next largest number of votes in the county at the last general election. Election boards may also include persons who are not members of either of those political parties. However, persons who are not members of either of those political parties shall not comprise more than one-third of the membership of an audit board. 26.203(2) The commissioner or the commissioner’s designee shall supervise the handling of ballots to ensure that the ballots are protected from alteration, damage, or loss. 26.203(3) If a polling place precinct is selected for an audit, the hand count shall be conducted by the audit board pursuant to Iowa Code section 50.51. The audit board shall hand count all ballots cast within the polling place precinct. For post-election audit purposes, the audit board shall count votes according to voting system programming standards, outlined in 721—subrule 22.41(1). 26.203(4) If an absentee and special voters precinct is selected for an audit, the audit board shall audit at least 50 percent of ballots, but no more than 2,000 ballots, cast within the precinct. At the commissioner’s discretion, more than 2,000 ballots may be audited. The ballots shall first be tabulated using the same automatic tabulating equipment and program used for tabulating the votes on election day, unless the program is believed or known to be flawed. The same ballots shall then be hand counted by the audit board pursuant to Iowa Code section 50.51. For post-election audit purposes, the audit board shall count votes according to voting system programming standards, outlined in 721—subrule 22.41(1). 26.203(5) The audit board shall reseal the ballots after they have been audited and before adjournment of the audit board. The signatures of the audit board members shall be placed across the seal or opening of the container so that it cannot be opened without breaking the seal, following the same procedure described in Iowa Code section 50.12. Audited ballots shall be stored separately from nonaudited ballots and clearly marked “AUDITED,” along with the date the audit was conducted. If an absentee and special voters precinct is selected for an audit, the ballots that were audited shall be sealed and kept separately from any ballots that were not selected for audit. 26.203(6) Upon completion of the audit, the commissioner shall report the findings on a form prescribed by the state commissioner. One copy of the audit report shall be transmitted to the state commissioner and one copy shall be filed with the county board of supervisors not later than 20 days following the election. 26.203(7) The commissioner may order an administrative recount pursuant to Iowa Code section 50.50 and rule 721—21.25(50) if the commissioner determines the results of an audit require an administrative recount.

ITEM 7. Amend 721—Chapter 26, implementation sentence, as follows: These rules are intended to implement Iowa Code sectionsections 49.98 as amended by 2004 Iowa Acts, Senate File 2269, section 21and 50.51. [Filed 9/5/18, effective 10/31/18][Published 9/26/18]Editor’s Note: For replacement pages for IAC, see IAC Supplement 9/26/18.

Back matter not included

Additional Formats