Bill Text: IA HF494 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to financial crime enforcement by assessing a drug paraphernalia surcharge, creating a money transfer service fee and related fund and income tax credit, and including retroactive applicability provisions. (Formerly HSB 150)(See HF 615.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2017-03-23 - Committee report, recommending amendment and passage. H.J. 766. [HF494 Detail]
Download: Iowa-2017-HF494-Introduced.html
House File 494 - Introduced HOUSE FILE BY COMMITTEE ON JUDICIARY (SUCCESSOR TO HSB 150) A BILL FOR 1 An Act relating to financial crime enforcement by assessing 2 a drug paraphernalia surcharge, creating a money transfer 3 service fee and related fund and income tax credit, and 4 including retroactive applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 2265HV (1) 87 jm/nh PAG LIN 1 1 Section 1. NEW SECTION. 80.32 Financial crime and wire 1 2 transmitter fund. 1 3 1. A financial crime and wire transmitter fund is 1 4 established in the office of the treasurer of state under the 1 5 control of the department. Any moneys annually appropriated, 1 6 granted, or credited to the fund, including any federal moneys, 1 7 are appropriated to the department for investigating indictable 1 8 criminal offenses committed for financial gain. 1 9 2. Notwithstanding section 12C.7, subsection 2, interest 1 10 and earnings on moneys deposited in the fund shall be credited 1 11 to the fund. Notwithstanding section 8.33, moneys remaining 1 12 in the fund at the end of the fiscal year shall not revert to 1 13 any other fund but shall remain available to be used for the 1 14 purposes specified in this section. 1 15 3. For the fiscal year beginning July 1, 2017, and for 1 16 each fiscal year thereafter, the department shall transfer 1 17 from the fund to the general fund of the state, the lesser of 1 18 the amount of fees credited to the fund for the fiscal year 1 19 pursuant to section 533C.104 or an amount of money equal to the 1 20 money transfer service tax credits claimed pursuant to section 1 21 422.10C in that fiscal year, if any. The moneys transferred 1 22 to the general fund of the state in accordance with this 1 23 subsection shall not be considered new revenues for purposes 1 24 of the state general fund expenditure limitation under section 1 25 8.54 but instead as replacement of a like amount included in 1 26 the expenditure limitation for the fiscal year in which the 1 27 transfer is made. 1 28 Sec. 2. NEW SECTION. 422.10C Money transfer service fee tax 1 29 credit. 1 30 1. The taxes imposed under this division, less the credits 1 31 allowed under section 422.12, shall be reduced by a money 1 32 transfer service fee tax credit equal to the amount of money 1 33 transfer service fees under section 533C.104 paid by the 1 34 taxpayer during the tax year. 1 35 2. A credit shall not be allowed under this section to 2 1 an individual who does not include on the tax return for the 2 2 taxable year such individual's valid taxpayer identification 2 3 number and, if the individual is married, the valid taxpayer 2 4 identification number of such individual's spouse. For 2 5 purposes of this subsection, "taxpayer identification number" 2 6 means the same as defined in section 32 of the Internal Revenue 2 7 Code. 2 8 3. Any credit in excess of the tax liability is refundable. 2 9 In lieu of claiming a refund, the taxpayer may elect to have 2 10 the overpayment shown on the taxpayer's final, completed return 2 11 credited to the tax liability for the following tax year. 2 12 Sec. 3. NEW SECTION. 533C.104 Money transfer service fee ==== 2 13 licensee requirements ==== enforcement. 2 14 1. For purposes of this section, unless the context 2 15 otherwise requires: 2 16 a. "Department" means the department of revenue. 2 17 b. "Director" means the director of revenue. 2 18 c. "Money transfer service" means the transmission of 2 19 money by any means including transmission within this country 2 20 or to or from locations abroad by payment instrument, wire, 2 21 facsimile, or electronic transfer, courier, or otherwise. 2 22 2. a. A licensee and the authorized delegates of a licensee 2 23 shall collect from customers a money transfer service fee equal 2 24 to one percent of the amount of each money transfer service 2 25 transaction. 2 26 b. Money transfer service fees shall be paid over to the 2 27 department by licensees and their authorized delegates who 2 28 furnish money transfer services. 2 29 c. The department, in consultation with the superintendent, 2 30 shall administer and enforce the money transfer service fee as 2 31 nearly as possible in conjunction with the administration and 2 32 enforcement of the state sales and use tax law, except that 2 33 portion of the law which implements the streamlined sales and 2 34 use tax agreement. 2 35 d. The director may require licensees and their authorized 3 1 delegates to register with the department for purposes of this 3 2 section. The director may also require a permit applicable 3 3 only to this section for any licensee or the authorized 3 4 delegate of a licensee not collecting taxes under chapter 423. 3 5 e. All powers and requirements of the director to administer 3 6 the state sales and use tax law are applicable to the 3 7 administration of the money transfer service fee, including but 3 8 not limited to the provisions of section 422.25, subsection 4, 3 9 sections 422.30, 422.67, and 422.68, section 422.69, subsection 3 10 1, sections 422.70 through 422.75, section 423.14, subsection 3 11 1 and subsection 2, paragraphs "b" through "e", and sections 3 12 423.15, 423.23, 423.24, 423.25, 423.31 through 423.35, 423.37 3 13 through 423.42, 423.46, and 423.47. 3 14 f. Failure by a licensee or a licensee's authorized 3 15 delegate to collect and remit money transfer service fees 3 16 or to comply with any other provision of this section shall 3 17 subject the licensee and the authorized delegates of a licensee 3 18 to the enforcement provisions of article 7 of this chapter. 3 19 The director and the department shall cooperate with the 3 20 superintendent in identifying violations of this section and in 3 21 discharging the superintendent's enforcement responsibilities 3 22 under article 7 of this chapter. 3 23 g. All money transfer service fees collected under this 3 24 section shall be deposited in a separate account in the 3 25 financial crime and wire transmitter fund established by 3 26 section 80.32. 3 27 3. A licensee and the authorized delegates of a licensee 3 28 furnishing money transfer services shall post a notice in the 3 29 form and manner prescribed by the superintendent that notifies 3 30 customers that upon filing an individual income tax return with 3 31 a valid taxpayer identification number, the customer shall be 3 32 entitled to an individual income tax credit equal to the amount 3 33 of money transfer service fees paid by the customer during the 3 34 tax year. 3 35 Sec. 4. Section 602.8102, subsection 135A, Code 2017, is 4 1 amended to read as follows: 4 2 135A. Assess the surcharges provided by sections 911.1, 4 3 911.2, 911.2A, 911.2B, 911.2C, 911.3,and911.4, and 911.5. 4 4 Sec. 5. Section 602.8108, Code 2017, is amended by adding 4 5 the following new subsection: 4 6 NEW SUBSECTION. 13. The clerk of the district court shall 4 7 remit all moneys collected from the assessment of the drug 4 8 paraphernalia surcharge provided in section 911.5 to the state 4 9 court administrator for deposit in the financial crime and wire 4 10 transmitter fund established in section 80.32. 4 11 Sec. 6. NEW SECTION. 911.5 Drug paraphernalia surcharge. 4 12 1. In addition to any other surcharge, the clerk of the 4 13 district court shall assess a drug paraphernalia surcharge of 4 14 five dollars if an adjudication of guilt or a deferred judgment 4 15 has been entered for a criminal violation of section 124.414 or 4 16 a similar city or county ordinance. 4 17 2. The surcharge shall be remitted by the clerk of court as 4 18 provided in section 602.8108, subsection 13. 4 19 Sec. 7. RETROACTIVE APPLICABILITY. The following provision 4 20 or provisions of this Act apply retroactively to January 1, 4 21 2017, for tax years beginning on or after that date: 4 22 1. The section of this division enacting section 422.10C. 4 23 EXPLANATION 4 24 The inclusion of this explanation does not constitute agreement with 4 25 the explanation's substance by the members of the general assembly. 4 26 This bill relates to financial crime enforcement by 4 27 assessing a drug paraphernalia surcharge and creating a money 4 28 transfer service fee and related fund and income tax credit. 4 29 DRUG PARAPHERNALIA SURCHARGE. The bill provides that the 4 30 clerk of the district court shall assess a drug paraphernalia 4 31 surcharge of five dollars if an adjudication of guilt or 4 32 a deferred judgment has been entered for possessing drug 4 33 paraphernalia in violation of Code section 124.414 or a similar 4 34 city or county ordinance. The bill specifies that the clerk of 4 35 the district court shall remit all moneys collected from the 5 1 assessment of the surcharge to the state court administrator 5 2 for deposit in the financial crime and wire transmitter fund 5 3 established by the bill. 5 4 MONEY TRANSFER SERVICE FEE AND RELATED FUND AND TAX CREDIT. 5 5 The bill requires a licensee under Code chapter 533C, the 5 6 uniform money services Act, to collect from customers a money 5 7 transfer service fee equal to 1 percent of the amount of each 5 8 money transfer service transaction. The bill defines "money 5 9 transfer service" as the transmission of money by any means 5 10 including transmission within this country or to or from 5 11 locations abroad by payment instrument, wire, facsimile, or 5 12 electronic transfer, courier, or otherwise. 5 13 The bill requires such licensees to pay such fees over to the 5 14 department of revenue. The bill requires the department, in 5 15 consultation with the superintendent of banking, to administer 5 16 and enforce the money transfer service fee as nearly as 5 17 possible in conjunction with the administration and enforcement 5 18 of the state sales and use tax law, except that portion of 5 19 the law which implements the streamlined sales and use tax 5 20 agreement. 5 21 The bill permits the director of revenue to require 5 22 licensees to register with the department for purposes of 5 23 the bill. The bill permits the director to require a permit 5 24 applicable only to the bill for any licensee not collecting 5 25 taxes under Code chapter 423. The bill provides that all 5 26 powers and requirements of the director to administer the state 5 27 sales and use tax law are applicable to the administration of 5 28 the money transfer service fee. 5 29 Failure by a licensee to collect and remit money transfer 5 30 service fees or to comply with any other provision of the bill 5 31 shall subject the licensee to the enforcement provisions of 5 32 article 7 of Code chapter 533C. The bill requires the director 5 33 and the department to cooperate with the superintendent in 5 34 identifying violations of the bill and in discharging the 5 35 superintendent's enforcement responsibilities under article 7 6 1 of Code chapter 533C. 6 2 Penalties provided for in article 7 of Code chapter 533C 6 3 include suspension and revocation of a license under Code 6 4 chapter 533C, civil penalties, and criminal penalties that 6 5 include class "C" and "D" felonies and aggravated and simple 6 6 misdemeanors. A class "C" felony is punishable by confinement 6 7 for no more than 10 years and a fine of at least $1,000 but 6 8 not more than $10,000. A class "D" felony is punishable by 6 9 confinement for no more than five years and a fine of at least 6 10 $750 but not more than $7,500. An aggravated misdemeanor 6 11 is punishable by confinement for no more than two years and 6 12 a fine of at least $625 but not more than $6,250. A simple 6 13 misdemeanor is punishable by confinement for no more than 30 6 14 days or a fine of at least $65 but not more than $625 or by 6 15 both. 6 16 The bill provides that all money transfer service fees 6 17 collected under the bill shall be deposited in the financial 6 18 crime and wire transmitter fund established by the bill. 6 19 The bill requires a licensee furnishing money transfer 6 20 services to post a notice in the form and manner prescribed 6 21 by the superintendent that notifies customers that upon 6 22 filing an individual income tax return with a valid taxpayer 6 23 identification number, the customer shall be entitled to an 6 24 individual income tax credit equal to the amount of money 6 25 transfer service fees paid by the customer during the tax year. 6 26 The bill also applies to authorized delegates of a licensee 6 27 under Code chapter 533C. 6 28 The bill provides an individual income tax credit equal to 6 29 the amount of money transfer service fees paid by the taxpayer 6 30 during the tax year. The bill provides that the credit shall 6 31 not be allowed to an individual who does not include on the tax 6 32 return for the taxable year the individual's valid taxpayer 6 33 identification number and that of the individual's spouse if 6 34 applicable. The bill provides that the credit is refundable 6 35 and may be credited to the individual's tax liability for the 7 1 following tax year. The provision enacting the tax credit 7 2 applies retroactively to January 1, 2017, for tax years 7 3 beginning on or after that date. 7 4 The bill establishes a financial crime and wire transmitter 7 5 fund in the office of the treasurer of state under the control 7 6 of the department of public safety. Any moneys annually 7 7 appropriated, granted, or credited to the fund, including any 7 8 federal moneys, are appropriated to the department of public 7 9 safety for the purpose of investigating indictable criminal 7 10 offenses committed for financial gain. Interest and earnings 7 11 on moneys deposited in the fund shall be credited to the fund 7 12 and moneys remaining in the fund at the end of the fiscal year 7 13 shall not revert. 7 14 The bill requires the department of public safety, for 7 15 the fiscal year beginning July 1, 2017, and for each fiscal 7 16 year thereafter, to transfer from the fund to the general 7 17 fund of the state, the lesser of the amount of money transfer 7 18 service fees collected or an amount of money equal to the money 7 19 transfer service tax credits claimed in that fiscal year, if 7 20 any. The bill provides that the moneys transferred to the 7 21 general fund of the state in accordance with the bill shall not 7 22 be considered new revenues for purposes of the state general 7 23 fund expenditure limitation under Code section 8.54 but instead 7 24 as replacement of a like amount included in the expenditure 7 25 limitation for the fiscal year in which the transfer is made. LSB 2265HV (1) 87 jm/nh
