Bill Text: IA HF615 | 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 HF 494 & HSB 150.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2018-01-08 - Rereferred to Ways and Means. H.J. 20. [HF615 Detail]
Download: Iowa-2017-HF615-Introduced.html
House File 615 - Introduced HOUSE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 494) (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 2265HZ (2) 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 4. A money transfer service fee shall not be applied to any 4 1 of the following: 4 2 a. A transaction between an individual and a business 4 3 registered with the secretary of state of Iowa or another 4 4 state in the United States, or between an individual and a 4 5 utility company authorized to do business in this state, which 4 6 is conducted through a bill payment system and for which the 4 7 money being transferred is for a good or service not otherwise 4 8 prohibited by state or federal law for a traceable debt. 4 9 b. An internet or telephone transfer conducted through a 4 10 debit card or credit card, or transfer by automated clearing 4 11 house. 4 12 c. The sale or servicing of a prepaid debit card or a 4 13 stored=value card. 4 14 d. The sale of a money order. 4 15 e. A check cashing transaction or a delayed deposit 4 16 transaction. 4 17 f. Any of the following: 4 18 (1) The United States or a department, agency, or 4 19 instrumentality thereof. 4 20 (2) A money transmission by the United States postal service 4 21 or by a contractor on behalf of the United States postal 4 22 service. 4 23 (3) A state, county, city, or any other governmental agency 4 24 or governmental subdivision of a state. 4 25 (4) The following entities whether chartered or organized 4 26 under the laws of a state or of the United States: a bank, bank 4 27 holding company, savings and loan association, savings bank, 4 28 credit union, office of an international banking corporation, 4 29 branch of a foreign bank, corporation organized pursuant to the 4 30 federal Bank Service Company Act, 12 U.S.C. {1861 = 1867, or 4 31 corporation organized under the federal Edge Act, 12 U.S.C. 4 32 {611 == 633. 4 33 (5) An electronic funds transfer of governmental benefits 4 34 for a federal, state, county, or governmental agency by a 4 35 contractor on behalf of the United States or a department, 5 1 agency, or instrumentality thereof, or a state or governmental 5 2 subdivision, agency, or instrumentality thereof. 5 3 (6) A board of trade designated as a contract market under 5 4 the federal Commodity Exchange Act, 7 U.S.C. {1 = 25, or a 5 5 person who, in the ordinary course of business, provides 5 6 clearance and settlement services for a board of trade to the 5 7 extent of its operation as or for such a board. 5 8 (7) A registered futures commission merchant under the 5 9 federal commodities laws to the extent of its operation as such 5 10 a merchant. 5 11 (8) A person who provides clearance or settlement services 5 12 pursuant to a registration as a clearing agency or an exemption 5 13 from such registration granted under the federal securities 5 14 laws to the extent of its operation as such a provider. 5 15 (9) An operator of a payment system to the extent that 5 16 the operator provides processing, clearing, or settlement 5 17 services, between or among persons excluded by this subsection, 5 18 in connection with wire transfers, credit card transactions, 5 19 debit card transactions, stored=value transactions, automated 5 20 clearing house transfers, or similar funds transfers. 5 21 (10) A person registered as a securities broker=dealer 5 22 under federal or state securities laws to the extent of the 5 23 person's operation as such a broker=dealer. 5 24 Sec. 4. Section 602.8102, subsection 135A, Code 2017, is 5 25 amended to read as follows: 5 26 135A. Assess the surcharges provided by sections 911.1, 5 27 911.2, 911.2A, 911.2B, 911.2C, 911.3,and911.4, and 911.5. 5 28 Sec. 5. Section 602.8108, Code 2017, is amended by adding 5 29 the following new subsection: 5 30 NEW SUBSECTION. 13. The clerk of the district court shall 5 31 remit all moneys collected from the assessment of the drug 5 32 paraphernalia surcharge provided in section 911.5 to the state 5 33 court administrator for deposit in the financial crime and wire 5 34 transmitter fund established in section 80.32. 5 35 Sec. 6. NEW SECTION. 911.5 Drug paraphernalia surcharge. 6 1 1. In addition to any other surcharge, the clerk of the 6 2 district court shall assess a drug paraphernalia surcharge of 6 3 five dollars if an adjudication of guilt or a deferred judgment 6 4 has been entered for a criminal violation of section 124.414 or 6 5 a similar city or county ordinance. 6 6 2. The surcharge shall be remitted by the clerk of court as 6 7 provided in section 602.8108, subsection 13. 6 8 Sec. 7. RETROACTIVE APPLICABILITY. The following provision 6 9 or provisions of this Act apply retroactively to January 1, 6 10 2017, for tax years beginning on or after that date: 6 11 1. The section of this division enacting section 422.10C. 6 12 EXPLANATION 6 13 The inclusion of this explanation does not constitute agreement with 6 14 the explanation's substance by the members of the general assembly. 6 15 This bill relates to financial crime enforcement by 6 16 assessing a drug paraphernalia surcharge and creating a money 6 17 transfer service fee and related fund and income tax credit. 6 18 DRUG PARAPHERNALIA SURCHARGE. The bill provides that the 6 19 clerk of the district court shall assess a drug paraphernalia 6 20 surcharge of five dollars if an adjudication of guilt or 6 21 a deferred judgment has been entered for possessing drug 6 22 paraphernalia in violation of Code section 124.414 or a similar 6 23 city or county ordinance. The bill specifies that the clerk of 6 24 the district court shall remit all moneys collected from the 6 25 assessment of the surcharge to the state court administrator 6 26 for deposit in the financial crime and wire transmitter fund 6 27 established by the bill. 6 28 MONEY TRANSFER SERVICE FEE AND RELATED FUND AND TAX CREDIT. 6 29 The bill requires a licensee under Code chapter 533C, the 6 30 uniform money services Act, to collect from customers a money 6 31 transfer service fee equal to 1 percent of the amount of each 6 32 money transfer service transaction. The bill defines "money 6 33 transfer service" as the transmission of money by any means 6 34 including transmission within this country or to or from 6 35 locations abroad by payment instrument, wire, facsimile, or 7 1 electronic transfer, courier, or otherwise. 7 2 The bill requires such licensees to pay such fees over to the 7 3 department of revenue. The bill requires the department, in 7 4 consultation with the superintendent of banking, to administer 7 5 and enforce the money transfer service fee as nearly as 7 6 possible in conjunction with the administration and enforcement 7 7 of the state sales and use tax law, except that portion of 7 8 the law which implements the streamlined sales and use tax 7 9 agreement. 7 10 The bill permits the director of revenue to require 7 11 licensees to register with the department for purposes of 7 12 the bill. The bill permits the director to require a permit 7 13 applicable only to the bill for any licensee not collecting 7 14 taxes under Code chapter 423. The bill provides that all 7 15 powers and requirements of the director to administer the state 7 16 sales and use tax law are applicable to the administration of 7 17 the money transfer service fee. 7 18 Failure by a licensee to collect and remit money transfer 7 19 service fees or to comply with any other provision of the bill 7 20 shall subject the licensee to the enforcement provisions of 7 21 article 7 of Code chapter 533C. The bill requires the director 7 22 and the department to cooperate with the superintendent in 7 23 identifying violations of the bill and in discharging the 7 24 superintendent's enforcement responsibilities under article 7 7 25 of Code chapter 533C. 7 26 Penalties provided for in article 7 of Code chapter 533C 7 27 include suspension and revocation of a license under Code 7 28 chapter 533C, civil penalties, and criminal penalties that 7 29 include class "C" and "D" felonies and aggravated and simple 7 30 misdemeanors. A class "C" felony is punishable by confinement 7 31 for no more than 10 years and a fine of at least $1,000 but 7 32 not more than $10,000. A class "D" felony is punishable by 7 33 confinement for no more than five years and a fine of at least 7 34 $750 but not more than $7,500. An aggravated misdemeanor 7 35 is punishable by confinement for no more than two years and 8 1 a fine of at least $625 but not more than $6,250. A simple 8 2 misdemeanor is punishable by confinement for no more than 30 8 3 days or a fine of at least $65 but not more than $625 or by 8 4 both. 8 5 The bill provides that all money transfer service fees 8 6 collected under the bill shall be deposited in the financial 8 7 crime and wire transmitter fund established by the bill. 8 8 The money transfer service fee does not apply to numerous 8 9 types of transactions including but not limited to a sale 8 10 between an individual and any business registered in the United 8 11 States, an internet or telephone transfer, the sale of a 8 12 prepaid debit card or stored=value card, or a check cashing or 8 13 delayed deposit transaction. 8 14 The money transfer service fee also does not apply to 8 15 numerous types of entities including but not limited to the 8 16 United States government, any state or local government, a 8 17 money transmission by the United States postal service, an 8 18 operator of a credit or debit payment system, or a commodity 8 19 or security trader. 8 20 The bill requires a licensee furnishing money transfer 8 21 services to post a notice in the form and manner prescribed 8 22 by the superintendent that notifies customers that upon 8 23 filing an individual income tax return with a valid taxpayer 8 24 identification number, the customer shall be entitled to an 8 25 individual income tax credit equal to the amount of money 8 26 transfer service fees paid by the customer during the tax year. 8 27 The bill also applies to authorized delegates of a licensee 8 28 under Code chapter 533C. 8 29 The bill provides an individual income tax credit equal to 8 30 the amount of money transfer service fees paid by the taxpayer 8 31 during the tax year. The bill provides that the credit shall 8 32 not be allowed to an individual who does not include on the tax 8 33 return for the taxable year the individual's valid taxpayer 8 34 identification number and that of the individual's spouse if 8 35 applicable. The bill provides that the credit is refundable 9 1 and may be credited to the individual's tax liability for the 9 2 following tax year. The provision enacting the tax credit 9 3 applies retroactively to January 1, 2017, for tax years 9 4 beginning on or after that date. 9 5 The bill establishes a financial crime and wire transmitter 9 6 fund in the office of the treasurer of state under the control 9 7 of the department of public safety. Any moneys annually 9 8 appropriated, granted, or credited to the fund, including any 9 9 federal moneys, are appropriated to the department of public 9 10 safety for the purpose of investigating indictable criminal 9 11 offenses committed for financial gain. Interest and earnings 9 12 on moneys deposited in the fund shall be credited to the fund 9 13 and moneys remaining in the fund at the end of the fiscal year 9 14 shall not revert. 9 15 The bill requires the department of public safety, for 9 16 the fiscal year beginning July 1, 2017, and for each fiscal 9 17 year thereafter, to transfer from the fund to the general 9 18 fund of the state, the lesser of the amount of money transfer 9 19 service fees collected or an amount of money equal to the money 9 20 transfer service tax credits claimed in that fiscal year, if 9 21 any. The bill provides that the moneys transferred to the 9 22 general fund of the state in accordance with the bill shall not 9 23 be considered new revenues for purposes of the state general 9 24 fund expenditure limitation under Code section 8.54 but instead 9 25 as replacement of a like amount included in the expenditure 9 26 limitation for the fiscal year in which the transfer is made. LSB 2265HZ (2) 87 jm/nh
