SF 479 – Determination of Iowa corporate income tax for broadcasters
SF 480 – Local property tax abatement for rehabilitation of nuisance buildings
SF 482 – Social and Charitable Gambling
SF 483 – Electric and Natural Gas vehicle fueling infrastructure tax credit
SF 484 – Medical Cannabis Act
SF 485 – PPEL technical changes
SF 486 – Approval and imposition of community college property tax levies
SF 487 – Portable electronics insurance
SF 488 – Air quality fund and air quality fees
FLOOR ACTION:
SF 479 provides for a new method of apportioning the income received by a commercial broadcaster for Iowa corporate income tax. Currently, the Department of Revenue uses an audience method for determining which portion of a broadcaster’s income from advertising and licensing agreements with local television service providers should be subject to taxes in Iowa. The national broadcasters who are paying the tax on the income they receive from licensing and advertising sold to local service providers often do not have access to audience information for determining what their tax obligation is. Additionally, border markets would have to determine how much of their audience was located in Iowa for determining which revenues are owed to Iowa versus the border state. This new method says that if the national broadcaster receives income from a television service provider located in Iowa, that income is used to determine their Iowa corporate income tax obligation. The new method is simpler and offers consistency for determining a broadcaster’s tax obligation. [3/26: 49-0 (Bertrand absent)]
SF 480 authorizes a local government to provide by ordinance 10-year exemptions from property tax of the actual value added to residential property by improvements to the property if it is declared a public nuisance prior to the improvements. As amended in committee, the city or county may establish an alternate schedule and/or an alternate rate for the exemption for the project. The applicant must also disclose other sources of public funding that they will use to finance the rehabilitation of the property. [3/26: 49-0 (Bertrand absent)]
COMMITTEE ACTION:
SF 482 is a rewrite of Iowa’s social and charitable gambling laws (Chapter 99B). SF 482 updates, simplifies and modernizes the Chapter to be current with gambling activities while removing out-of-date restrictions. Highlights include:
- Charitable Gambling (current 99B.2 and 99B.7)
- Record Keeping. Updated record keeping requirements with modern transactional practices, such as removing requirement that all expenses must be paid by check.
- Annual Report. Moved annual report to calendar year rather than state fiscal year, as recommended by licensees.
- Raffles. Created category titles for different raffle types (very small, small, large and very large). Exempted very small (under $1,000) from licensure.
- Charitable Gambling in places serving alcohol and with gaming. Eliminated a provision related to alcohol licenses that made holding a raffle difficult in a hotel ballroom or convention center. Also clarified that charitable gambling is only prohibited on the gaming floor of a casino and not in other areas. However, bingo is not allowed in any casino (licensed under 99D or 99F).
- Expense limitation. Changed limitations on expenses from 25 percent to 40 percent, bingo operations in particular have difficulty meeting this limitation.
- Bingo prize restrictions. Clarified prize restrictions with bingo.
- Number of Bingo Occasions. Fixed the number of bingo occasions to allow 15 per month rather than 14, which creates challenges in 31 day months for those places with regular days of the week.
- Bingo Prize Limits. Raised the limit of prizes for bingo games from $100 to $250.
- Additional licenses of qualified organizations. Eliminated additional licenses for games nights, raffle at a fair and certain veterans licenses.
- Electronic raffles. Added section for electronic raffles frequently held at large sport events.
- Forms of payment allowed (99B.17). Deletes gambling on credit section and creates forms of payment section that limits amusement devices, movable amusement concessions and social gambling to cash (current requirement) and allows charitable gambling to accept cash, check, credit card and debit card (currently cash only, except bingo can accept check).
- Contests (99B.11). Updates contests section to include current contests and allows for additional activities within the types. Currently, section lists all of the allowable activities but does not allow other similar activities. For example, allows video golf contests, but other types of skilled video game contests are prohibited.
- A licensed qualified organization must not hold bingo within a building or structure that is licensed pursuant to Iowa code chapters 99D or 99F (Gaming Facilities).
An amendment adopted by the committee would allow cash prizes of $1,000 or less and donated merchandise prize(s) of $5,000 or less for a very small raffle. Very small raffles are currently limited to prizes (cash or merchandise) of $1,000 or less. The amendment also increases the maximum allowed to be won or lost in social gambling between individuals from $50 to $200 over a 24-hour period. Finally, the amendment changes the “sports betting pool” or “pool” definition from selecting a square on grid corresponding to numbers on two intersecting sides of the grid to “wagering money for each chance to win based on the outcome of a sports event or series of sports events where the competitors of the sports event or series of sports events are natural persons.” (i.e., NCAA bracket pools would be allowed.) [3/26: short form (Feenstra, Smith excused)]
SF 483 establishes a tax credit for the costs of purchasing and installing electric or natural gas vehicle fueling infrastructure. The allowed equipment would include pumps and other equipment associated with the dispensing of compressed natural gas and charging equipment for electricity. The amount of tax credit equals 30 percent of the cost to purchase the equipment and 30 percent to complete the installation. For tax credits taken for agricultural or commercial installations, the tax credit must be spread equally over the course of three years, while a residential installation may take the full tax credit amount in one tax year. Tax credits for residential installations can only be for an electronic facility. The tax credit is applicable to qualified installations put in service before January 1, 2018. [3/26: short form (Feenstra, Smith excused)]
SF 484 strikes the entire Medical Cannabidiol Act (Iowa Code Chapter 124D) and replaces it with a new Medical Cannabis Act (Iowa Code Chapter 124E). Key highlights:
- Medical Cannabis: The allowable form of medical cannabis is expanded beyond cannabidiol to include any species of the genus cannabis plant, or any mixture or preparation of them, including whole plant extracts and resins. Forms beyond cannabidiol have been found to be more helpful for various medical conditions. The Iowa Department of Public Health (DPH) is directed to promulgate administrative rules to establish the form and quantity of medical cannabis allowed to be dispensed. Smoking of medical cannabis is prohibited.
- Registration Card: The bill uses the same registration card application, approval and dispensing processes as those used by DPH and Department of Transportation (DOT) for medical cannabidiol. However, DPH is directed to establish medical cannabis registration card fees ($100 for patients, $25 for low-income patients and $25 for caretakers) to cover administrative costs. Law enforcement has the same access to the registration list for verifying compliance. All information from patients must be kept confidential.
- Affirmative Defense: The bill uses the same affirmative defense for the possession, use and administration as last year’s Medical Cannabidiol Act, and applies it to the possession and use of medical cannabis for the expanded set of debilitating medical conditions. The same affirmative defenses are also applied to health care practitioners as was applied to neurologists under the Medical Cannabidiol Act. Affirmative defenses are also extended to medical cannabis manufacturers, dispensaries and employees.
- Eligible Conditions & Medical Advisory Board: The debilitating medical conditions list is expanded beyond intractable epilepsy to include cancer, multiple sclerosis, epilepsy, AIDS or HIV, glaucoma, hepatitis C, Crohn’s Disease, amyotrophic lateral sclerosis, Ehlers-Danlos Syndrome, post-traumatic stress syndrome (PTSD), and chronic pain emanating from an underlying medical condition that is not responsive to conventional treatment or produces debilitating side effects. By August 15, 2015, the director of DPH must establish a Medical Advisory Board consisting of eight board-certified health care practitioners knowledgeable about the use of medical cannabis and three patients. Duties of the Board include reviewing and recommending for approval to DPH additional debilitating medical conditions that qualify for the use of medical cannabis; accepting and reviewing petitions to add debilitating medical conditions to the list of those that qualify for the use of medical cannabis; advising the DPH on the location of dispensaries, the form and quantity of allowable medical cannabis that may be dispensed, and general oversight of manufacturers; and convene at least twice per year to conduct public hearings and evaluate petitions. DPH must promulgate administrative rules to identify criteria and set forth procedures for including additional debilitating medical conditions that qualify for the use of medical cannabis.
- Health Care Practitioner’s Certification: Recognizing the longer list of eligible conditions, the written recommendation from a neurologist in the Medical Cannabidiol Act is replaced with a written certification provided by a health care practitioner that attests to the patient suffering from a debilitating medical condition that is eligible for the medical cannabis program. Health care practitioners licensed under Chapter 148 to practice medicine or surgery, physician’s assistants licensed under Chapter 148C or advanced registered nurse practitioners licensed under Chapter 152 or 152E may provide written certifications. The patient or caregiver may present the written certification to DPH when applying for the medical cannabis registration card. Written certifications expire after one year and may be renewed annually. Health care practitioners are not required to provide a written certification. This process is modeled after Minnesota’s certification.
- Manufacturers & Dispensaries: Four medical cannabis manufacturers are to be selected and licensed by DPH to possess, cultivate, supply and transport medical cannabis within the state. Twelve dispensaries are to be licensed by DPH for selling medical cannabis to patients and caregivers who possess a medical cannabis registration card. The locations of the dispensaries are to be based on geographic need. DPH must solicit applications and license the two manufacturers by December 1, 2015. Licenses must be approved or re-issued by December 1 of each year. Dispensaries must be licensed by April 1, 2016, and must agree to begin supplying medical cannabis to patients by July 1, 2016. DPH must consider these factors in determining whether to license a manufacturer or dispensary: technical medical cannabis expertise, qualifications of employees, long-term financial stability, ability to provide appropriate security measures, ability to meet production demands, and projection and ongoing assessment of fees to patients for medical cannabis. Manufacturers must contract with the State Hygienic Lab to test the medical cannabis for content, contamination and consistency.
- Manufacturers and dispensaries must implement security requirements, including requirements for protection of each location by a operational security alarm system, facility access controls, perimeter intrusion detection systems and a personnel identification system. Manufacturers and dispensaries are prohibited from sharing office space with, referring patients to or having any financial relationships with health care practitioners. Consumption of medical cannabis on the premises of a manufacturer or dispensary is prohibited. Reasonable inspections by DPH are permitted. Manufacturers are prohibited from employing those under age 18 or any person who has been convicted of a disqualifying felony offense. Employees must be subject to a background investigation conducted by the Division of Criminal Investigation and a national criminal history background check. Manufacturers and dispensaries are not allowed within 1,000 feet of a public or private school. DPH may establish reasonable restrictions concerning signage, marketing, displays and advertising of medical cannabis. Manufacturers must provide a reliable and ongoing supply of medical cannabis for all eligible patients. All manufacturing, harvesting, packaging and processing must take place in an enclosed, locked facility at a physical address provided to DPH during the licensure process. Prior to dispensing medical cannabis, the dispensary is required to verify that the patient or caregiver has a valid medical cannabis registration card, assign a tracking number to the medical cannabis, ensure proper packaging (including child resistant packaging and exemptions for packaging for elderly patients), and affix a label with a list of all active ingredients and patient/caregiver identifying information. Any manufacturer or dispensary acting without a valid license will be assessed a civil penalty of up to $1,000 per violation in addition to any other applicable penalties.
- Fees: The medical cannabis program is intended to be financially self-sufficient. The manufacturer license application fee is set at $7,500, dispensary license fee is set at $5,000, and the manufacturer is authorized to charge fees to the patient/caregiver to dispense medical cannabis. DPH will set annual fees for manufacturers and dispensaries based on regulation and inspection costs. DPH retains all fees.
- Reciprocity: Medical cannabis registration cards or their equivalent issued in another state will be considered valid in Iowa for possession and use of medical cannabis, but medical cannabis is only to be dispensed to Iowa residents.
- Reports: The University of Iowa Carver College of Medicine and College of Pharmacy maintains their responsibility to provide an annual report to the Legislature and DPH outlining the scientific literature, studies and clinical trials regarding the use of medical cannabis on patients with a debilitating medical condition.
- Emergency Rules & Transition Provisions: DPH is authorized to adopt emergency administrative rules to implement this bill. Medical cannabidiol registration cards issued prior to July 1, 2015, remain in effect for the 12-month period following their issuance and may be renewed prior to the expiration of this 12-month period.
[3/26: 9-5 (Anderson, Behn, Breitbach, Feenstra, Schultz “no”; Smith absent)]
SF 485 is a technical fix for a couple of school districts that would like to refinance their bonding rates. Current Code authorizes a physical plant and equipment levy (PPEL) of not exceeding $1.67 per $1,000 of assessed valuation in the district. The PPEL consists of the regular physical plant and equipment levy (which cannot exceed $0.33 per $1,000 of assessed valuation) in the district and a voter-approved physical plant and equipment levy (which cannot exceed $1.34 per $1,000 of assessed valuation) in the district. This bill allows a school district, by resolution of the board of directors, to impose a PPEL at a rate in excess of the levy rate limitations under Code section 298.2 if the board has refunded or refinanced a loan agreement and such refunding or refinancing complies with the maturity period authorized by voters and results in a lower amount of interest on the amount of the loan agreement. The rate imposed by a school district under the provisions of the bill will not exceed the rate imposed during the budget year in which the loan agreement was refunded or refinanced. [4/1: short form (Behn, Dotzler excused)]
SF 486 would replace the existing public referendum process for levy rates and allow levies to be reauthorized by a vote of the board if the levy has already been approved by the voters in two elections. The bill also provides that voters have the opportunity to petition for a reverse referendum on the continuance of a levy at the time the levy comes up for renewal. If a board wants to increase a levy rate, it would be subject to an election as well. However, all levies are currently issued at the maximum rate. [4/1: short form (Behn, Dotzler excused)]
SF 487 regulates the sale of portable electronics insurance and sets licensure requirements for portable electronics vendors that offer such insurance. It defines “portable electronics” as devices that are personal, self-contained, easily carried by an individual, battery operated and used for a variety of specified purposes, as well as accessories or services related to the use of such devices. “Portable electronics insurance” is a contract providing coverage for the repair or replacement of portable electronics. Such insurance does not include a service contract or extended warranty or insurance covering a seller’s or manufacturer’s obligations under a warranty.
Individuals cannot offer or sell portable electronics insurance unless they are licensed as insurance producers, are issued a portable electronics insurance license or are endorsees of the licensed vendor. The license, issued by the Insurance Commissioner, authorizes a portable electronics vendor and its endorsees (unlicensed employees or authorized representatives of the vendor) to offer or sell portable electronics insurance to consumers in connection with the sale of portable electronics, accessories or services.
A portable electronics vendor must file an application for a license to sell portable electronics insurance that includes a certificate by the insurer that the vendor is trustworthy and competent, and is accompanied by a fee of $50 for each endorsee at a location of the vendor, or $500 per location, whichever amount is less, with a maximum fee of $5,000 for vendors with multiple locations.
An endorsee of a licensed vendor may sell or offer portable electronics insurance under the authority of the vendor’s license if the endorsee is at least 18 years old; the vendor supplies a list with its license application of all locations at which insurance will be offered; the vendor provides for training of its endorsees about portable electronics insurance, ethical sales practices, required disclosures to prospective purchasers and re-training about new products at least every three years; and the vendor keeps a list of endorsees who have completed training.
Costs for the insurance must be itemized separately in any billing statement for the insurance. If the insurance is included with the purchase or lease of portable electronics and accessories or related services, the stand-alone cost for similar insurance must be disclosed on the consumer’s bill and in marketing materials available at the point of sale. The sale of portable electronics insurance to a customer through a “free-trial offer” is prohibited.
A licensed vendor cannot sell portable electronics insurance unless at the time of sale or enrollment in the insurance, or within a reasonable time after a telephone transaction, the vendor makes disclosures and provides written information to the prospective customer that includes material terms and conditions of coverage; describes the claims process; discloses additional information about the policy; and provides information about the vendor.
The vendor is prohibited from offering to sell or transacting any other types of insurance, and cannot advertise or represent itself or its endorsees as licensed insurers or property and casualty broker-agents. The vendor cannot pay an endorsee compensation based primarily on the number of customers that purchase portable electronics insurance, other than incidental compensation for those sales.
The Insurance Commissioner may adopt rules to implement and administer the new Code chapter, which takes effect January 1, 2016. [4/1: short form (Behn, Dotzler excused)]
SF 488 establishes an air quality fund in the state treasury to receive fees collected by the Department of Natural Resources (DNR) as part of the state’s air quality program. Fees are to be established by the Environmental Protection Commission and will apply to major source permitted users, minor source permitted users and asbestos-related activities.
Fees must be used for operation of the air quality program. Fees will be deposited into an account that matches the user who paid the fee (major, minor or asbestos). Fees in each account must only be used for activities associated with the respective source.
The DNR must annually meet with a stakeholder group to review fees and the costs of the major source, minor source or asbestos programs. During these meetings, DNR and the stakeholder groups will develop a consensus on the expenses of the air quality program and the fees that will be used to fund those activities.
This legislation came from the air quality stakeholders working group, which met in 2014. This workgroup included a number of permitted air users and was formed with the intent of providing a sustainable and effective funding plan for the operation of the DNR’s air quality program, which is responsible for issuing permits to regulated industries and protecting the health of Iowans by monitoring air emissions and developing strategies for reducing air pollution. [4/1: short form (Behn, Dotzler excused)]