Bill Summary – FastDemocracy

House File 2710 - Introduced
                                  HOUSE FILE 2710
                                  BY COMMITTEE ON WAYS AND MEANS
                                  (SUCCESSOR TO HSB 723)
                            A BILL FOR
An Act relating to the duties and responsibilities of the
  department of revenue including sports wagering, the
  lottery, cigarette and tobacco taxes, alcoholic beverages,
  and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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                            DIVISION I
                         SPORTS WAGERING
    Section 1. Section 99F.18, Code 2024, is amended to read as
 follows:
    99F.18 Tax on winnings.
    1. All winnings derived from slot machines operated
 pursuant to this chapter are Iowa earned income and are subject
 to state and federal income tax laws. An amount deducted from
 winnings for payment of the state tax, pursuant to section
 422.16, subsection 2, shall be remitted to the department of
 revenue on behalf of the winner.
    2. All winnings from sports wagering authorized under this
 chapter are Iowa earned income and subject to state and federal
 income tax laws. An amount deducted from winnings for payment
 of state tax pursuant to section 422.16, subsection 2, shall be
 remitted to the department of revenue on behalf of the winner.
    Sec. 2. Section 422.16, subsection 2, paragraph d, Code
 2024, is amended to read as follows:
    d. For the purposes of this subsection, state income tax
 shall be withheld on winnings in excess of six hundred dollars
 derived from gambling activities authorized under chapter
 99B or 99G. State income tax shall be withheld on winnings
 in excess of one thousand dollars from gambling activities
 authorized under chapter 99D. State income tax shall be
 withheld on winnings in excess of one thousand two hundred
 dollars derived from slot machines authorized under chapter
 99F. State income tax shall be withheld on winnings from
 sports wagering authorized under chapter 99F whenever federal
 income tax is required to be withheld from the same winnings in
 accordance with the Internal Revenue Code.
                            DIVISION II
                              LOTTERY
    Sec. 3. Section 99G.3, Code 2024, is amended by adding the
 following new subsections:
    NEW SUBSECTION. 3A. “Bona fide social relationship” means
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 a real, genuine, unfeigned social relationship between two or
 more persons, where each person has an established knowledge of
 the other, which has not arisen for the purpose of gambling.
    NEW SUBSECTION. 9A. “Lottery courier” means a person who
 offers or undertakes to procure tickets or shares in lottery
 games from a lottery retailer on behalf of another person, and
 who does not have a bona fide social relationship with that
 other person.
    Sec. 4. Section 99G.24, subsection 7, Code 2024, is amended
 by adding the following new paragraph:
    NEW PARAGRAPH. j. The department determines, based upon
 available information, that either the structure or activities
 of the applicant’s business is likely to violate provisions of
 this chapter, or any regulation, policy, or procedure of the
 division.
    Sec. 5. Section 99G.30, Code 2024, is amended by adding the
 following new subsections:
    NEW SUBSECTION. 8. A person shall not do any of the
 following:
    a. Act or operate as a lottery courier.
    b. Do business with a lottery courier.
    NEW SUBSECTION. 9. A retailer shall not knowingly sell
 tickets or shares in a lottery game to any of the following:
    a. A lottery courier.
    b. An employee or agent of a lottery courier.
    Sec. 6. Section 99G.31, subsection 3, paragraph g, Code
 2024, is amended by striking the paragraph and inserting in
 lieu thereof the following:
    g. A ticket or share issued by the division shall not
 be purchased by and no prize shall be paid to any of the
 following:
    (1) A member of the board.
    (2) An officer or employee of the department.
    (3) An officer or employee of the state providing services
 to the department to administer this chapter if such officer
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 or employee has access to confidential information which may
 compromise the integrity of the lottery.
    (4) A spouse, child, sibling, or parent residing as a member
 of the same household in the principal place of residence of
 any person described in subparagraphs (1) through (3).
    Sec. 7. Section 99G.34, Code 2024, is amended by adding the
 following new subsection:
    NEW SUBSECTION. 9. Ticket order history; ticket inventory;
 or any records that if disclosed could impair or adversely
 impact the security, integrity, or fairness of a lottery game
 or the security of lottery retailers.
                           DIVISION III
   CIGARETTE AND TOBACCO TAXES AND REPORTS —— ELECTRONIC FILING
    Sec. 8. Section 453A.1, subsection 27, Code 2024, is amended
 to read as follows:
    27. “State permit” shall mean and include all permits issued
 by the department to distributors, wholesalers, and retailers
 under this chapter except the permits issued to retailers
 approved by cities and counties pursuant to sections 453A.13
 and 453A.47A.
    Sec. 9. Section 453A.6, subsection 8, paragraph a, Code
 2024, is amended to read as follows:
    a. Pay directly to the department, in lieu of the tax
 under subsection 1, a tax equal to three and six hundredths
 cents on each cigarette dispensed from such machine. Payments
 made under this paragraph shall be remitted to the department
 electronically.
    Sec. 10. Section 453A.8, subsection 2, Code 2024, is amended
 to read as follows:
    2. Orders for cigarette tax stamps, including the payment
 for such stamps, shall be sent direct made to the department
 electronically on a form to be prescribed by the director,
 except as provided in subsection 6.
    Sec. 11. Section 453A.13, subsection 2, paragraph a, Code
 2024, is amended to read as follows:
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    a. The department shall issue state permits to distributors,
 wholesalers, and cigarette vendors, and retailers that
 make delivery sales of alternative nicotine products and
 vapor products, subject to the conditions provided in this
 subchapter. If an out-of-state retailer makes delivery
 sales of alternative nicotine products or vapor products, an
 application shall be filed with the department electronically
 and a permit shall be issued for the out-of-state retailer’s
 principal place of business. Cities may issue approve retail
 permits to retailers permit applications for applicants with
 a place of business located within their respective limits.
 County boards of supervisors may issue approve retail permits
 to retailers permit applications for applicants with a place of
 business in their respective counties, outside of the corporate
 limits of cities. Upon approval of a retail permit application
 by a city or county, the department shall issue the permit to
 the applicant on behalf of the city or county, in the manner
 determined by the department. A city or county shall use the
 electronic portal of the department to process retail permit
 applications. A city or county that is unable to use the
 electronic portal of the department may request permission from
 the director to process retail applications by another method.
    Sec. 12. Section 453A.13, subsection 2, paragraph c, Code
 2024, is amended to read as follows:
    c. A city or county shall submit a duplicate of any
 application for a retail permit to the department within thirty
 days of the issuance. The department shall submit the current
 list of all retail permits issued to the department of health
 and human services by the last day of each quarter of a state
 fiscal year.
    Sec. 13. Section 453A.13, subsection 3, paragraph a, Code
 2024, is amended to read as follows:
    a. All permits provided for in this subchapter shall expire
 on June 30 of each year. A permit shall not be granted or
 issued until the applicant has paid the fees to the department
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 required in this subchapter for the next period ending on June
 30 next, to the department or the city or county granting the
 permit, the fees provided for in this subchapter. The annual
 state permit fee for a distributor, cigarette vendor, and
 wholesaler is one hundred dollars when the permit is granted
 during the months of July, August, or September. However,
 whenever a state permit holder operates more than one place of
 business, a duplicate state permit shall be issued for each
 additional place of business on payment of five dollars for
 each duplicate state permit, but refunds as provided in this
 subchapter do not apply to any duplicate permit issued.
    Sec. 14. Section 453A.13, subsection 5, unnumbered
 paragraph 1, Code 2024, is amended to read as follows:
    Permits shall be issued only upon applications accompanied
 by the fee indicated above, and by an adequate bond as provided
 in section 453A.14, and upon forms furnished by the department
 upon written request. The failure to furnish such forms shall
 be no excuse for the failure to file the forms unless absolute
 refusal is shown. Applications, any supporting documentation,
 and the associated fees required by this section shall be
 submitted to the department electronically. The forms shall
 set forth all of the following:
    Sec. 15. Section 453A.13, subsection 9, unnumbered
 paragraph 1, Code 2024, is amended to read as follows:
    Each permit issued shall describe clearly the place of
 business for which it is issued, shall be nonassignable,
 consecutively numbered, designating the kind of permit, and
 shall authorize the sale of cigarettes, alternative nicotine
 products, or vapor products in this state subject to the
 limitations and restrictions herein contained. The retail
 permits shall be upon forms furnished by the department or on
 forms made available or approved by the department.
    Sec. 16. Section 453A.14, subsection 1, unnumbered
 paragraph 1, Code 2024, is amended to read as follows:
    No A state or manufacturer’s permit shall not be issued until
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 the applicant files a bond, with good and sufficient surety,
 to be approved by the director, which bond shall be in favor of
 the state and conditioned upon the payment of taxes, damages,
 fines, penalties, and costs adjudged against the permit holder
 for violation of any of the provisions of this subchapter. The
 bonds shall be on forms prescribed by the director and shall be
 filed electronically. A bond filed under this section shall be
 in one of the following amounts:
    Sec. 17. Section 453A.14, subsection 2, Code 2024, is
 amended to read as follows:
    2. A person shall not engage in interstate business unless
 the person files a bond, with good and sufficient surety in an
 amount of not less than one thousand dollars. A bond required
 by this subsection shall be on forms prescribed by the director
 and shall be filed electronically. The amount of the bond
 required of the person shall be fixed by the director, subject
 to the minimum limitation provided in this section. The bond
 is subject to approval by the director and shall be payable to
 the state in Des Moines, Polk county, and conditioned upon the
 payment of taxes, damages, fines, penalties, and costs adjudged
 against the person for violation of any of the requirements of
 this subchapter affecting the person, on a form prescribed by
 the director.
    Sec. 18. Section 453A.15, subsection 7, Code 2024, is
 amended to read as follows:
    7. The director may require by rule that Any reports
 required to be made under this subchapter shall be filed by
 electronic transmission electronically.
    Sec. 19. Section 453A.16, Code 2024, is amended to read as
 follows:
    453A.16 Manufacturer’s permit.
    The department may, upon application of any manufacturer,
 issue without charge to the manufacturer a manufacturer’s
 permit. The application shall contain information as
 the director shall prescribe and the application shall be
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 submitted to the department electronically. The holder of a
 manufacturer’s permit is authorized to purchase stamps from
 the department, and must affix stamps to individual packages
 of cigarettes outside of this state, prior to their shipment
 into the state unless the cigarettes are shipped to an Iowa
 permitted distributor or an Iowa permitted distributor’s agent.
    Sec. 20. Section 453A.17, subsection 1, Code 2024, is
 amended to read as follows:
    1. Every distributing agent in the state, now engaged,
 or who desires to become engaged, in the business of storing
 unstamped cigarettes which are received in interstate commerce
 for distribution or delivery only upon order received from
 without the state or to be sold outside the state, shall
 file with the department electronically, an application for
 a distributing agent’s permit, on a form prescribed by the
 director, to be furnished upon written request. The failure
 to furnish shall be no excuse for the failure to file the same
 unless an absolute refusal is shown. Said form shall set
 forth the name under which such distributing agent transacts
 or intends to transact such business as a distributing agent,
 the principal office and place of business in Iowa to which
 the permit is to apply, and if other than an individual, the
 principal officers or members thereof and their addresses. The
 director may require any other information in said application.
 No distributing agent shall engage in such business until
 such application has been filed and fee in the sum of one
 hundred dollars paid for the permit and until the permit has
 been obtained. Such permit shall expire on June 30 following
 the date of issuance. All of the provisions of the last
 two paragraphs of section 453A.14, relative to bonds, are
 incorporated herein and by this reference made applicable to
 distributing agents. Upon failure to furnish adequate bond
 as required, the permit shall be revoked without hearing. An
 application shall be filed and a permit obtained for each place
 of business owned or operated by a distributing agent.
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    Sec. 21. Section 453A.18, Code 2024, is amended to read as
 follows:
    453A.18 Forms for records and reports.
    The department shall furnish or make available in electronic
 form, without charge, to holders of the various permits, forms
 in sufficient quantities to enable permit holders to make the
 reports required to be made under this subchapter. The permit
 holders shall furnish at their own expense the books, records,
 and invoices, required to be used and kept, but the books,
 records, and invoices shall be in exact conformity to the forms
 prescribed for that purpose by the director, and shall be kept
 and used in the manner prescribed by the director. However,
 the director may, by express order in certain cases, authorize
 permit holders to keep their records in a manner and upon forms
 other than those prescribed. The authorization may be revoked
 at any time. A report, book, record, invoice, and any other
 document required to be submitted to the department under this
 subchapter shall be submitted electronically.
    Sec. 22. Section 453A.23, subsections 1 and 2, Code 2024,
 are amended to read as follows:
    1. Subject to this subchapter, a retailer’s permit may be
 issued by the department to any dining car company, sleeping
 car company, railroad or railway company. The permit shall
 authorize the holder to keep for sale, and sell, cigarettes
 at retail on any dining car, sleeping car, or passenger car
 operated by the applicant in, through, or across the state of
 Iowa, subject to a