Senate File 2396 - Reprinted SENATE FILE 2396 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 3115) (As Amended and Passed by the Senate March 5, 2024 ) A BILL FOR An Act relating to state taxation by modifying lottery and 1 alcoholic beverages provisions under the purview of the 2 department of revenue, changing the taxation of lump sum 3 distributions of retirement income, increasing estimated tax 4 thresholds, making appropriations, and including effective 5 date and retroactive applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 SF 2396 (3) 90 jm/jh/mb

S.F. 2396 DIVISION I 1 DISCLOSURE OF TAX INFORMATION 2 Section 1. Section 421.19, subsection 2, Code 2024, is 3 amended by striking the subsection and inserting in lieu 4 thereof the following: 5 2. The department may notify federal, state, or local 6 law enforcement agencies, and may disclose state returns, 7 state return information, state investigative information or 8 audit information, or any other state information, to such law 9 enforcement agencies, if the department has information that 10 indicates any of the following: 11 a. A person intentionally filed a false claim, affidavit, 12 return, or other information with intent to evade tax or obtain 13 a refund, credit, or other benefit from the department. 14 b. A person failed to file a return with intent to evade a 15 tax or filing requirement. 16 c. A person failed to pay with the intent to evade tax. 17 d. A person committed any act or omission that is a criminal 18 offense under a provision of this title administered by the 19 department. 20 Sec. 2. Section 421.19, subsection 3, Code 2024, is amended 21 to read as follows: 22 3. Notwithstanding sections 422.20 and 422.72 , the 23 department may disclose state returns, state return 24 information, state investigative or audit information, or any 25 other state information as provided under this section . 26 Sec. 3. EFFECTIVE DATE. This division of this Act, being 27 deemed of immediate importance, takes effect upon enactment. 28 DIVISION II 29 ANNUAL REPORTING 30 Sec. 4. Section 421.60, subsection 2, paragraph k, Code 31 2024, is amended by striking the paragraph. 32 Sec. 5. Section 422.75, Code 2024, is amended to read as 33 follows: 34 422.75 Statistics —— publication. 35 -1- SF 2396 (3) 90 jm/jh/mb 1/ 23

S.F. 2396 The department shall prepare and publish an annual report 1 which shall include statistics reasonably available, with 2 respect to the operation of this chapter , including amounts 3 collected, classification of taxpayers, and such other facts 4 as are deemed pertinent and valuable. The annual report shall 5 also include the reports and information required pursuant to 6 section 421.60, subsection 2 , paragraph “k” . 7 DIVISION III 8 PROPERTY TAX —— EXTENSIONS 9 Sec. 6. Section 425.20, subsection 3, Code 2024, is amended 10 to read as follows: 11 3. In case of sickness, absence, or other disability of 12 the claimant or if, in the judgment of the director of revenue 13 or the director of health and human services , as applicable, 14 good cause exists and the claimant requests an extension, the 15 director of health and human services may extend the time for 16 filing a claim for reimbursement and the director of revenue 17 may extend the time for filing a claim for credit . However, 18 any further time granted shall not extend beyond December 31 19 of the year following the year in which the claim was required 20 to be filed. Claims filed as a result of this subsection shall 21 be filed with the director of health and human services or the 22 director of revenue, as applicable, who shall provide for the 23 reimbursement of the claim to the claimant. 24 DIVISION IV 25 FARM TENANCY INCOME TAX EXCLUSION 26 Sec. 7. Section 422.7, subsection 14, paragraph a, Code 27 2024, is amended to read as follows: 28 a. Subtract, to the extent included, net income received 29 by an eligible individual pursuant to a farm tenancy agreement 30 covering real property held by the eligible individual for 31 ten or more years, if the eligible individual materially 32 participated in a farming business for ten or more years in the 33 aggregate . 34 Sec. 8. Section 422.7, subsection 14, paragraph f, Code 35 -2- SF 2396 (3) 90 jm/jh/mb 2/ 23

S.F. 2396 2024, is amended by adding the following new subparagraph: 1 NEW SUBPARAGRAPH . (04) “Held” shall be determined with 2 reference to the holding period provisions of section 1223 of 3 the Internal Revenue Code and the federal regulations pursuant 4 thereto. 5 DIVISION V 6 PASS-THROUGH ENTITIES 7 Sec. 9. Section 422.25C, subsection 2, Code 2024, is amended 8 to read as follows: 9 2. For tax years beginning on or after January 1, 2020, any 10 adjustments to a partnership’s or pass-through entity’s items 11 of income, gain, loss, expense, or credit, or an adjustment to 12 such items allocated to a partner that holds an interest in a 13 partnership or pass-through entity for the reviewed year by 14 the department as a result of a state partnership audit, shall 15 be determined at the partnership level or pass-through entity 16 level in the same manner as provided by section 6221(a) of the 17 Internal Revenue Code and the regulations thereunder unless a 18 different treatment is specifically provided in this title . 19 The provisions of sections 6222, 6223, and 6227 of the Internal 20 Revenue Code and the regulations thereunder shall also apply to 21 a partnership or pass-through entity and its direct or indirect 22 partners in the same manner as provided in such sections unless 23 a different treatment is specifically provided in this title . 24 For purposes of applying such sections, due account shall be 25 made for differences in federal and Iowa terminology. The 26 adjustment provided by section 6221(a) of the Internal Revenue 27 Code shall be determined as provided in such section but shall 28 be based on Iowa taxable income or other tax attributes of 29 the partnership or pass-through entity as determined pursuant 30 to this chapter for the reviewed year. The department shall 31 issue a notice of adjustment to the partnership or pass-through 32 entity. Such notice shall be treated as an assessment for the 33 purposes of section 422.25 , and the notice shall be appealable , 34 except as provided in section 422.25, by the partnership or 35 -3- SF 2396 (3) 90 jm/jh/mb 3/ 23

S.F. 2396 pass-through entity pursuant to sections 422.28 and 422.29 and 1 shall be issued within the time period provided by section 2 422.25 . Once the adjustments to partnership-related or 3 pass-through entity-related items or reallocations of income, 4 gains, losses, expenses, credits, and other attributes among 5 such partners for the reviewed year are finally determined, 6 the partnership or pass-through entity and any direct partners 7 or indirect partners shall then be subject to the provisions 8 of section 422.25, subsection 1 , paragraph “e” , and section 9 422.25A in the same manner as if the state partnership audit 10 were a federal partnership level audit, and as if the final 11 state partnership audit adjustment were a final federal 12 partnership adjustment. The penalty exceptions in section 13 421.27, subsection 2 , paragraphs “b” and “c” , shall not apply 14 to a state partnership audit. 15 Sec. 10. EFFECTIVE DATE. This division of this Act, being 16 deemed of immediate importance, takes effect upon enactment. 17 Sec. 11. RETROACTIVE APPLICABILITY. This division of this 18 Act applies retroactively to January 1, 2024. 19 DIVISION VI 20 SALES TAX CHANGES 21 Sec. 12. Section 423.36, subsection 9, paragraph a, Code 22 2024, is amended to read as follows: 23 a. Except as provided in paragraph “b” , purchasers, users, 24 and consumers of tangible personal property, specified digital 25 products, or enumerated services taxed pursuant to subchapter 26 II or III of this chapter or chapter 423B may be authorized, 27 pursuant to rules adopted by the director, to remit tax owed 28 directly to the department instead of the tax being collected 29 and paid by the seller. To qualify for a direct pay tax permit, 30 the purchaser, user, or consumer must accrue a tax liability of 31 more than four eight thousand dollars in tax under subchapters 32 II and III in a semimonthly monthly period and make deposits 33 and file returns pursuant to section 423.31 . This authority 34 shall not be granted or exercised except upon application to 35 -4- SF 2396 (3) 90 jm/jh/mb 4/ 23

S.F. 2396 the director and then only after issuance by the director of a 1 direct pay tax permit. 2 DIVISION VII 3 MOTOR FUEL TAXES 4 Sec. 13. Section 452A.3, subsection 1, paragraph b, 5 unnumbered paragraph 1, Code 2024, is amended to read as 6 follows: 7 On and after July 1, 2026, an excise tax of thirty cents is 8 imposed on each gallon of ethanol blended gasoline classified 9 as E-15 or higher. Before July 1, 2026, the rate of the 10 excise tax on ethanol blended gasoline classified as E-15 or 11 higher shall be based on the number of gallons of ethanol 12 blended gasoline classified as E-15 or higher that are 13 distributed in this state as expressed as a percentage of the 14 number of gallons of motor fuel distributed in this state, 15 which is referred to as the distribution percentage. For 16 purposes of this paragraph, only ethanol blended gasoline and 17 nonblended gasoline, not including aviation gasoline, shall 18 be used in determining the percentage basis for the excise 19 tax. The department shall determine the percentage basis 20 for each determination period beginning January 1 and ending 21 December 31 based on data from the reports filed pursuant to 22 section 452A.33 . Before June 1, the department may amend the 23 distribution percentage due to a mistake, if there is a late 24 report filed by a retail dealer to the department under section 25 452A.33, subsection 1, or if the distribution percentage is 26 not accurate. The rate for the excise tax shall apply for the 27 period beginning July 1 and ending June 30 following the end 28 of the determination period. Before July 1, 2026, the rate 29 of the excise tax on each gallon of ethanol blended gasoline 30 classified as E-15 or higher shall be as follows: 31 Sec. 14. Section 452A.3, subsection 3, paragraph a, 32 subparagraph (2), unnumbered paragraph 1, Code 2024, is amended 33 to read as follows: 34 Except as otherwise provided in this section and in this 35 -5- SF 2396 (3) 90 jm/jh/mb 5/ 23

S.F. 2396 subchapter , this subparagraph shall apply to the excise tax 1 imposed on each gallon of biodiesel blended fuel classified 2 as B-11 or higher used for any purpose for the privilege of 3 operating motor vehicles in this state. On and after July 1, 4 2026, the rate of the excise tax on each gallon of biodiesel 5 blended fuel classified as B-11 or higher is thirty-two 6 and five-tenths cents. Before July 1, 2026, the rate of 7 the excise tax shall be based on the number of gallons of 8 biodiesel blended fuel classified as B-11 or higher that are 9 distributed in this state as expressed as a percentage of 10 the number of gallons of special fuel for diesel engines of 11 motor vehicles distributed in this state, which is referred 12 to as the distribution percentage. The department shall 13 determine the percentage basis for each determination period 14 beginning January 1 and ending December 31 based on data from 15 the reports filed pursuant to section 452A.33 . Before June 16 1, the department may amend the distribution percentage due 17 to a mistake, if there is a late report filed by a retail 18 dealer to the department under section 452A.33, subsection 1, 19 or the distribution percentage is not accurate. The rate of 20 the excise tax shall apply for the period beginning July 1 and 21 ending June 30 following the end of the determination period. 22 Before July 1, 2026, the rate of the excise tax on each gallon 23 of biodiesel blended fuel classified as B-11 or higher shall 24 be as follows: 25 Sec. 15. Section 452A.15, subsection 5, Code 2024, is 26 amended to read as follows: 27 5. The director may impose a civil penalty against any 28 person who fails to timely file the reports or keep the records 29 required under this section . The penalty shall be one hundred 30 dollars for the first violation and shall increase by one 31 hundred dollars for each additional violation occurring in the 32 calendar year in which the first violation occurred. 33 Sec. 16. Section 452A.33, subsection 2, unnumbered 34 paragraph 1, Code 2024, is amended to read as follows: 35 -6- SF 2396 (3) 90 jm/jh/mb 6/ 23

S.F. 2396 On or before April 1 the department shall deliver a report 1 to the governor and the legislative services agency. Before 2 June 1, the department may amend the report due to a mistake, 3 if there is a late report by a retail dealer under subsection 4 1, or if the report is not accurate. The report shall compile 5 information reported by retail dealers to the department as 6 provided in this section and shall at least include all of the 7 following: 8 Sec. 17. Section 452A.41, subsection 5, paragraph a, Code 9 2024, is amended to read as follows: 10 a. For the purpose of determining the amount of liability 11 for the electric fuel tax, each dealer and user shall file with 12 the department not later than July 31 for the period beginning 13 January 1 and ending June 30, and not later than January 30 14 31 for the period beginning July 1 and ending December 30 31 , 15 a biannual tax return certified under penalties for false 16 certification. The return shall show, with reference to each 17 location at which fuel is delivered or placed by the dealer or 18 user into the battery or other energy storage device of any 19 electric motor vehicle during the next preceding six calendar 20 months, information as required by the department. On and 21 after January 1, 2026, the department may require by rule that 22 such tax returns be filed quarterly. 23 Sec. 18. Section 452A.44, Code 2024, is amended by adding 24 the following new subsection: 25 NEW SUBSECTION . 4. If electric fuel is sold or dispensed 26 for a nontaxable purpose, the purchaser may complete and 27 provide an exemption certificate produced by the department to 28 the license holder. 29 DIVISION VIII 30 VETERANS TRUST FUND AND LOTTERY 31 Sec. 19. Section 99G.3, Code 2024, is amended by adding the 32 following new subsection: 33 NEW SUBSECTION . 17A. “Setoff program” means the program 34 administered pursuant to section 421.65. 35 -7- SF 2396 (3) 90 jm/jh/mb 7/ 23

S.F. 2396 Sec. 20. Section 99G.7, subsection 1, paragraph e, Code 1 2024, is amended by striking the paragraph. 2 Sec. 21. Section 99G.39, subsection 3, Code 2024, is amended 3 to read as follows: 4 3. Two million five hundred thousand dollars in lottery 5 revenues shall be transferred each fiscal year to the veterans 6 trust fund established pursuant to section 35A.13 prior to 7 deposit of the lottery revenues in the general fund pursuant 8 to section 99G.40 . However, if the balance of the veterans 9 trust fund is fifty million dollars or more on both July 1 of 10 the current fiscal year and July 1 of the preceding fiscal 11 year , the moneys shall be appropriated to the department for 12 distribution to county directors of veteran affairs, with fifty 13 percent of the moneys to be distributed equally to each county 14 and fifty percent of the moneys to be distributed to each 15 county based upon the population of veterans in the county, 16 so long as the moneys distributed to a county do not supplant 17 moneys appropriated by that county for the county director of 18 veteran affairs. 19 Sec. 22. Section 99G.41, subsections 1, 2, 3, and 4, Code 20 2024, are amended to read as follows: 21 1. Any claimant agency may submit to the department a 22 list of the names of all persons indebted to such claimant 23 agency or to persons on whose behalf the claimant agency is 24 acting. The A lottery prize payment awarded as cash or cash 25 equivalents is subject to the setoff program. Additionally, a 26 debtor and the full amount of the debt shall be compiled in a 27 list, and collectible from any lottery winnings prize payment 28 awarded as cash or cash equivalents due the debtor without 29 regard to limitations on the amounts that may be collectible in 30 increments through garnishment or other proceedings. Such list 31 shall constitute a valid lien upon and claim of lien against 32 the lottery winnings prize payment of any debtor named in such 33 list. The list shall contain the names of the debtors, their 34 social security numbers if available, and any other information 35 -8- SF 2396 (3) 90 jm/jh/mb 8/ 23

S.F. 2396 that assists the department in identifying the debtors named in 1 the list. The list shall be treated the same as setoff program 2 information under section 421.65, subsection 2, paragraph “a” . 3 2. The department is authorized and directed to withhold 4 any winnings paid out directly by the department subject to the 5 lien created by this section , and send notice to the winner or 6 send notice as directed by the setoff program . However, if the 7 winner appears and claims winnings in person, the department 8 shall notify the winner at that time by hand delivery of such 9 action. The department shall pay the funds over to the agency 10 administering the offset to the setoff program. 11 3. Notwithstanding the provisions of section 99G.34 which 12 prohibit disclosure by the department of certain portions 13 of the contents of prize winner records or information, 14 and notwithstanding any other confidentiality statute, 15 the department may provide to a claimant agency the setoff 16 program and public agency, as defined in section 421.65, all 17 information necessary to accomplish and effectuate the intent 18 of this section . 19 4. The information obtained by a claimant agency from the 20 department in accordance with this section shall retain its 21 confidentiality and shall only be used by a claimant agency 22 in the pursuit of its debt collection duties and practices. 23 Any employee or prior employee of any claimant agency who 24 unlawfully discloses any such information for any other 25 purpose, except as otherwise specifically authorized by law, 26 shall be subject to the same penalties specified by law for 27 unauthorized disclosure of confidential information by an agent 28 or employee of the department under this chapter . 29 DIVISION IX 30 ALCOHOLIC BEVERAGES 31 Sec. 23. Section 123.3, Code 2024, is amended by adding the 32 following new subsection: 33 NEW SUBSECTION . 36A. “Operating still” means a still that 34 is registered with the federal alcohol and tobacco tax and 35 -9- SF 2396 (3) 90 jm/jh/mb 9/ 23

S.F. 2396 trade bureau of the United States department of the treasury 1 and is actively used to manufacture spirits. 2 Sec. 24. Section 123.30, subsection 4, Code 2024, is amended 3 to read as follows: 4 4. Notwithstanding any provision of this chapter to the 5 contrary, a person holding a retail alcohol license to sell 6 alcoholic beverages for consumption on the licensed premises 7 may permit a customer to remove one unsealed bottle of wine 8 for consumption off the premises if the customer has purchased 9 and consumed a portion of the bottle of wine on the licensed 10 premises. The licensee or the licensee’s agent shall securely 11 reseal such bottle in a bag designed so that it is visibly 12 apparent that the resealed bottle of wine has not been tampered 13 with and provide a dated receipt for the resealed bottle of 14 wine to the customer. A wine bottle resealed pursuant to the 15 requirements of this subsection is subject to the requirements 16 of sections 321.284 and 321.284A . A person holding a retail 17 alcohol license to sell alcoholic beverages for consumption on 18 the licensed premises may permit a customer to carry an open 19 container of wine from the person’s licensed premises into 20 another immediately adjacent licensed premises that is covered 21 by a license or permit that authorizes the consumption of wine, 22 a temporarily closed public right-of-way, or a private place. 23 Sec. 25. Section 123.30, Code 2024, is amended by adding the 24 following new subsection: 25 NEW SUBSECTION . 5. A person holding a retail alcohol 26 license to sell alcoholic beverages for consumption on the 27 licensed premises may permit a customer to carry an open 28 container of wine or beer from the person’s licensed premises 29 to one of the following immediately adjacent locations: 30 a. Another licensed premises that authorizes the consumption 31 of beer or wine. 32 b. A temporarily closed public right-of-way. 33 c. A private place. 34 Sec. 26. Section 123.43A, subsection 6, Code 2024, is 35 -10- SF 2396 (3) 90 jm/jh/mb 10/ 23

S.F. 2396 amended to read as follows: 1 6. Notwithstanding any provision of this chapter to the 2 contrary or the fact that a person is the holder of a class 3 “A” native distilled spirits license, a native distillery may 4 be granted a class “C” retail alcohol license as defined in 5 section 123.30 for the same premises licensed under a class “A” 6 native distilled spirits license where the manufacturing of 7 native distilled spirits occurs . A native distillery may be 8 granted not more than two class “C” retail alcohol licenses. 9 A manufacturer of native distilled spirits distillery may be 10 issued a class “C” retail alcohol license regardless of whether 11 the manufacturer is also a manufacturer of beer pursuant to a 12 class “A” beer permit or a manufacturer of native wine pursuant 13 to a class “A” wine permit. 14 Sec. 27. Section 123.45, subsection 3, Code 2024, is amended 15 to read as follows: 16 3. A person engaged in the wholesaling of beer or wine 17 may sell only disposable glassware, which is constructed of 18 paper, paper laminated, or plastic materials and designed 19 primarily for personal consumption on a one-time usage 20 basis, to retailers for use within the premises of licensed 21 establishments, for an amount which is greater than or equal 22 to an amount which represents the greater of either the amount 23 paid for the disposable glassware by the supplier or the amount 24 paid for the disposable glassware by the wholesaler. Also, 25 notwithstanding any other provision of this chapter or the 26 fact that a person is the holder of a class “A” beer permit, 27 a native brewery may be granted not more than two a class “C” 28 retail alcohol licenses license or not more than two a special 29 class “C” retail alcohol licenses license , both as defined in 30 section 123.30 , for the same premises licensed under a class 31 “A” beer permit where the manufacturing of beer occurs. A 32 native brewery may be granted not more than two class “C” 33 retail alcohol licenses or two special class “C” retail alcohol 34 licenses. A native brewery may be issued a class “C” retail 35 -11- SF 2396 (3) 90 jm/jh/mb 11/ 23

S.F. 2396 alcohol license or a special class “C” retail alcohol license, 1 regardless of whether that person is also a manufacturer 2 of native distilled spirits pursuant to a class “A” native 3 distilled spirits license or a manufacturer of native wine 4 pursuant to a class “A” wine permit. 5 Sec. 28. Section 123.176, subsection 5, Code 2024, is 6 amended to read as follows: 7 5. Notwithstanding any other provision of this chapter 8 or the fact that a person is the holder of a class “A” wine 9 permit , a person engaged in the business of manufacturing 10 native wine may be granted a class “C” retail alcohol license 11 or special class “C” retail native wine license as defined in 12 section 123.30 , for the same premises licensed under a class 13 “A” wine permit where the manufacturing of native wine occurs . 14 A manufacturer of native wine may be granted not more than 15 two class “C” retail alcohol licenses or special class “C” 16 retail native wine licenses. A manufacturer of native wine 17 may be issued a class “C” retail alcohol license or special 18 class “C” retail native wine license regardless of whether the 19 manufacturer is also a manufacturer of beer pursuant to a class 20 “A” beer permit or a manufacturer of native distilled spirits 21 pursuant to a class “A” native distilled spirits license. 22 DIVISION X 23 INHERITANCE TAX —— FUTURE CODE CHANGES DUE TO REPEAL 24 Sec. 29. Section 12D.9, subsection 3, Code 2024, is amended 25 to read as follows: 26 3. State For a death occurring before January 1, 2025, state 27 inheritance tax treatment of interests in Iowa educational 28 savings plans shall be as provided in section 450.4, subsection 29 8 . This subsection shall apply to all Iowa educational savings 30 plans existing on or after July 1, 1998. 31 Sec. 30. Section 12I.8, subsection 3, Code 2024, is amended 32 to read as follows: 33 3. State For a death occurring before January 1, 2025, state 34 inheritance tax treatment of interests in Iowa ABLE savings 35 -12- SF 2396 (3) 90 jm/jh/mb 12/ 23

S.F. 2396 plans shall be as provided in section 450.4, subsection 9 . 1 Sec. 31. Section 12I.10, subsection 3, Code 2024, is amended 2 to read as follows: 3 3. State For a death occurring before January 1, 2025, state 4 inheritance tax treatment of interests in the qualified ABLE 5 program with which the state has contracted pursuant to this 6 section shall be as provided in section 450.4, subsection 9 . 7 Sec. 32. Section 16.177, subsection 8, Code 2024, is amended 8 to read as follows: 9 8. Bonds issued under this section are declared to be issued 10 for an essential public and governmental purpose and all bonds 11 issued under this section shall be exempt from taxation by the 12 state of Iowa and the interest on the bonds shall be exempt 13 from the state income tax and the any state inheritance tax. 14 Sec. 33. Section 321.47, subsection 2, paragraph a, Code 15 2024, is amended to read as follows: 16 a. The persons entitled under the laws of descent and 17 distribution to the possession and ownership of a vehicle owned 18 in whole or in part by a decedent who died intestate, upon 19 filing an affidavit stating the name and date of death of the 20 decedent, the right to possession and ownership of the persons 21 filing the affidavit, and that there has been no administration 22 of the decedent’s estate, which instrument must also contain 23 an agreement by the affiant to indemnify creditors of the 24 decedent who would be entitled to levy execution upon the motor 25 vehicle to the extent of the value of the motor vehicle, shall, 26 upon complying with the other title transfer requirements of 27 this chapter , be issued a registration card for the decedent’s 28 interest in the vehicle and a certificate of title to the 29 vehicle. If a decedent died testate, and either the will is 30 not probated or is admitted to probate without administration, 31 the persons entitled to the possession and ownership of 32 a vehicle owned in whole or in part by the decedent may 33 file an affidavit and, upon complying with the other title 34 transfer requirements of this chapter , shall be issued a 35 -13- SF 2396 (3) 90 jm/jh/mb 13/ 23

S.F. 2396 registration card for the decedent’s interest in the vehicle 1 and a certificate of title to the vehicle. The affidavit 2 must contain the same information and indemnity agreement 3 as is required in cases of intestacy under this subsection . 4 Chapter 450 is not For a death occurring before January 1, 5 2025, a requirement of chapter 450 shall not be considered 6 satisfied by the filing of the affidavit provided for in this 7 subsection . If, from the records in the office of the county 8 treasurer, there appear to be any liens on the vehicle, the 9 certificate of title must contain a statement of the liens 10 unless the application is accompanied by proper evidence of 11 the satisfaction or extinction of such liens. Evidence of 12 extinction includes but is not limited to an affidavit of the 13 applicant stating that a security interest was foreclosed as 14 provided in chapter 554, article 9, part 6 . The department 15 shall waive the certificate of title fee and surcharge required 16 under sections 321.20 , 321.20A , 321.23 , 321.46 , 321.52 , and 17 321.52A if the person entitled to possession and ownership of 18 a vehicle, as provided in this subsection , is the surviving 19 spouse of a decedent. 20 Sec. 34. Section 331.602, subsection 23, Code 2024, is 21 amended to read as follows: 22 23. Forward For deaths occurring before January 1, 2025, 23 forward to the director of revenue a copy of any deed, bill of 24 sale, or other transfer which shows that it is made or intended 25 to take effect at or after the death of the person executing 26 the instrument as provided in section 450.81 . 27 Sec. 35. Section 331.756, subsection 57, Code 2024, is 28 amended to read as follows: 29 57. Represent For a death occurring before January 1, 2025, 30 represent the state in litigation relating to the inheritance 31 tax if requested by the department of revenue as provided in 32 section 450.1 . 33 Sec. 36. Section 421.27, subsection 1, paragraph d, 34 subparagraph (13), Code 2024, is amended to read as follows: 35 -14- SF 2396 (3) 90 jm/jh/mb 14/ 23

S.F. 2396 (13) That For a death occurring before January 1, 2025, 1 that an Iowa inheritance tax return is filed for an estate 2 within the later of nine months from the date of death or sixty 3 days from the filing of a disclaimer by the beneficiary of the 4 estate refusing to take the property or right or interest in 5 the property. 6 Sec. 37. Section 421.60, subsection 2, paragraph c, 7 subparagraph (1), Code 2024, is amended to read as follows: 8 (1) If the notice of assessment or denial of a claim for 9 refund relates to a tax return filed pursuant to section 10 422.14 , or pursuant to chapter 450 for a death occurring before 11 January 1, 2025, by the taxpayer which designates an individual 12 as an authorized representative of the taxpayer with respect to 13 that return, or if a power of attorney has been filed with the 14 department by the taxpayer which designates an individual as 15 an authorized representative of the taxpayer with respect to 16 any tax that is included in the notice of assessment or denial 17 of a claim for refund, a copy of the notice together with any 18 additional information required to be sent to the taxpayer 19 shall be sent to the authorized representative as well. 20 Sec. 38. Section 422.27, subsection 1, Code 2024, is amended 21 to read as follows: 22 1. A final account of a personal representative , as defined 23 in section 450.1 , shall not be allowed by any court unless the 24 account shows, and the judge of the court finds, that all taxes 25 imposed by this subchapter upon the personal representative, 26 which have become payable, have been paid, and that all taxes 27 which may become due are secured by bond or deposit, or are 28 otherwise secured. The certificate of acquittances of the 29 department of revenue is conclusive as to the payment of the 30 tax to the extent of the acquittance. This subsection does 31 not apply if all property in the estate of a decedent is 32 held in joint tenancy with right of survivorship by husband 33 and wife alone. For purposes of this subsection, “personal 34 representative” means an administrator, executor, or trustee as 35 -15- SF 2396 (3) 90 jm/jh/mb 15/ 23

S.F. 2396 each is defined in section 633.3. 1 Sec. 39. Section 455G.6, subsection 14, Code 2024, is 2 amended to read as follows: 3 14. Bonds issued under the provisions of this section are 4 declared to be issued for an essential public and governmental 5 purpose and all bonds issued under this subchapter shall be 6 exempt from taxation by the state of Iowa and the interest on 7 the bonds shall be exempt from the state income tax and the any 8 state inheritance tax. 9 Sec. 40. Section 496C.14, subsection 6, paragraph h, Code 10 2024, is amended to read as follows: 11 h. Notwithstanding the provisions of this section , 12 payment of any part of the purchase price for shares of a 13 deceased shareholder shall not be required until the executor 14 or administrator of the deceased shareholder provides 15 any indemnity, release, or other document from any taxing 16 authority, which is reasonably necessary to protect the 17 corporation against liability for any estate , inheritance, and 18 death taxes tax, or any inheritance tax for a death occurring 19 before January 1, 2025 . 20 Sec. 41. Section 524.805, subsection 8, Code 2024, is 21 amended to read as follows: 22 8. A state bank may receive deposits from one or more 23 persons with the provision that upon the death of the 24 depositors the deposit account shall be the property of the 25 person or persons designated by the deceased depositors as 26 shown on the deposit account records of the state bank. After 27 payment by the state bank, the proceeds shall remain subject 28 to the any debts of the decedent and the any payment of Iowa 29 inheritance tax , if any for a death occurring prior to January 30 1, 2025 . A state bank paying the person or persons designated 31 shall not be liable as a result of that action for any debts 32 of the decedent or for any estate, inheritance, or succession 33 taxes which may be due this state. 34 Sec. 42. Section 541A.2, subsection 6, unnumbered paragraph 35 -16- SF 2396 (3) 90 jm/jh/mb 16/ 23

S.F. 2396 1, Code 2024, is amended to read as follows: 1 An individual development account closed in accordance 2 with this subsection is not subject to the limitations and 3 benefits provided by this chapter but is subject to state tax 4 in accordance with the provisions of section 422.7, subsection 5 17 , and in accordance with the provisions of section 450.4, 6 subsection 6 , for a death occurring before January 1, 2025 . An 7 individual development account may be closed for any of the 8 following reasons: 9 Sec. 43. Section 602.8102, subsection 63, Code 2024, is 10 amended to read as follows: 11 63. Carry out duties relating to the inheritance tax as 12 provided in chapter 450 for deaths occurring before January 1, 13 2025 . 14 Sec. 44. Section 633.21, Code 2024, is amended to read as 15 follows: 16 633.21 Appraisers’ fees and referees’ fees fixed by rule. 17 The district judges of each judicial district shall by rule 18 fix the fees of probate referees, and also provide, insofar as 19 practicable, a uniform schedule of compensation for inheritance 20 tax appraisers, other appraisers, brokers, and agents employed 21 at estate expense. 22 Sec. 45. Section 633.31, subsection 2, paragraph a, Code 23 2024, is amended to read as follows: 24 a. For services performed in short form probates 25 pursuant to sections 450.22 and 450.44 for deaths occurring 26 before January 1, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15.00 27 Sec. 46. Section 633.356, subsection 1, unnumbered 28 paragraph 1, Code 2024, is amended to read as follows: 29 When the gross value of the decedent’s personal property 30 that would otherwise be distributed by will or intestate 31 succession is or has been, at any time since the decedent’s 32 death, fifty thousand dollars or less and there is no real 33 property , or for deaths occurring before January 1, 2025, the 34 real property passes to persons exempt from inheritance tax 35 -17- SF 2396 (3) 90 jm/jh/mb 17/ 23

S.F. 2396 as joint tenants with full rights of survivorship pursuant to 1 chapter 450 , and if forty days have elapsed since the death of 2 the decedent, a successor as defined in subsection 2 may, by 3 furnishing an affidavit prepared pursuant to subsection 3 or 4 8 , and without procuring letters of appointment, do any of the 5 following with respect to one or more items of such personal 6 property: 7 Sec. 47. Section 633.356, subsection 3, paragraph a, 8 subparagraph (3), Code 2024, is amended to read as follows: 9 (3) That the gross value of the decedent’s personal property 10 that would otherwise be distributed by will or intestate 11 succession is, or has been at any time since the decedent’s 12 death, fifty thousand dollars or less and there is no real 13 property , or for deaths occurring before January 1, 2025, the 14 real property passes to persons exempt from inheritance tax 15 as joint tenants with full rights of survivorship pursuant to 16 chapter 450 . 17 Sec. 48. Section 633.356, subsection 3, paragraph a, 18 subparagraph (10), Code 2024, is amended to read as follows: 19 (10) That no inheritance or other taxes are owed to the 20 department of revenue for a death occurring prior to January 1, 21 2025 , or if taxes are owed, that the taxes will be paid to the 22 extent of funds received pursuant to the affidavit. 23 Sec. 49. Section 633.356, subsection 9, Code 2024, is 24 amended to read as follows: 25 9. Upon receipt of an affidavit under subsection 3 and 26 reasonable proof under subsection 5 of the identity of each 27 successor seeking distribution by virtue of the affidavit, 28 the holder of the property shall disclose to the affiant 29 whether the value of the property held by the holder is, or has 30 been at any time since the decedent’s death, fifty thousand 31 dollars or less. An affidavit furnished for the purpose of 32 determining whether the value of the property is, or has 33 been at any time since the decedent’s death, fifty thousand 34 dollars or less need not contain the language required under 35 -18- SF 2396 (3) 90 jm/jh/mb 18/ 23