Bill Text: IA SSB3216 | 2013-2014 | 85th General Assembly | Introduced
Bill Title: A study bill for an act relating to the administrative appeals process for certain tax matters and a related study and report, and including effective date and applicability provisions.
Spectrum: Unknown
Status: (N/A - Dead) 2014-04-07 - In Ways and Means [SSB3216 Detail]
Download: Iowa-2013-SSB3216-Introduced.html
Senate
Study
Bill
3216
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
BOLKCOM)
A
BILL
FOR
An
Act
relating
to
the
administrative
appeals
process
for
1
certain
tax
matters
and
a
related
study
and
report,
and
2
including
effective
date
and
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
TLSB
6204XC
(1)
85
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S.F.
_____
DIVISION
I
1
STATE
BOARD
OF
TAX
REVIEW
2
Section
1.
Section
421.1,
subsection
5,
paragraph
a,
Code
3
2014,
is
amended
to
read
as
follows:
4
a.
Upon
its
own
motion
or
upon
appeal
by
any
affected
5
taxpayer,
the
state
board
shall
review
the
record
evidence
6
and
the
decisions
of,
and
any
orders
or
directive
issued
by,
7
the
director
of
revenue
under
Title
X,
subtitle
2,
for
the
8
identification
of
taxable
property,
classification
of
property
9
as
real
or
personal,
or
for
assessment
and
collection
valuation
10
of
taxes
property
by
the
department
under
Title
X,
subtitle
11
2,
or
an
order
to
reassess
or
to
raise
assessments
to
any
12
local
assessor
under
Title
X,
subtitle
2
,
and
shall
affirm,
13
modify,
reverse,
or
remand
them
within
sixty
days
from
the
14
date
the
case
is
submitted
to
the
board
for
decision.
For
an
15
appeal
to
the
board
to
be
valid,
written
notice
must
be
given
16
to
the
department
within
thirty
days
of
the
rendering
of
the
17
decision,
order,
or
directive
from
which
the
appeal
is
taken.
18
The
director
shall
certify
to
the
board
the
record,
documents,
19
reports,
audits,
and
all
other
information
pertinent
to
the
20
decision,
order,
or
directive
from
which
the
appeal
is
taken.
21
Sec.
2.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
22
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
23
enactment.
24
Sec.
3.
APPLICABILITY.
This
division
of
this
Act
applies
25
to
appeals
made
to
the
state
board
of
tax
review
on
or
after
26
the
effective
date
of
this
division
of
this
Act,
and
appeals
27
pending
before
the
state
board
of
tax
review
on
the
effective
28
date
of
this
division
of
this
Act
shall
be
governed
by
section
29
421.1,
Code
2014.
30
DIVISION
II
31
ADMINISTRATIVE
APPEALS
32
Sec.
4.
Section
421.23,
Code
2014,
is
amended
to
read
as
33
follows:
34
421.23
Fees
and
mileage.
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The
fees
and
mileage
of
witnesses
attending
any
hearing
of
1
the
department,
including
contested
case
hearings
but
excluding
2
small
case
hearings
,
pursuant
to
any
subpoena,
shall
be
the
3
same
as
those
of
witnesses
in
civil
cases
in
district
court.
4
Sec.
5.
Section
421.60,
subsection
2,
paragraph
g,
Code
5
2014,
is
amended
to
read
as
follows:
6
g.
A
taxpayer
may
request
in
writing
that
a
contested
case
7
proceeding
or
small
case
proceeding,
whichever
is
applicable,
8
be
commenced
by
the
department
after
a
period
of
six
months
9
from
the
filing
of
a
proper
appeal
by
the
taxpayer.
The
10
department
shall
file
an
answer
within
thirty
days
of
receipt
11
of
the
request
and
a
contested
case
proceeding
or
small
case
12
proceeding,
whichever
is
applicable,
shall
be
commenced.
In
13
the
case
of
an
appeal
of
an
assessment,
failure
to
answer
14
within
the
thirty-day
time
period
and
after
a
request
has
been
15
made
shall
result
in
the
suspension
of
interest
from
the
time
16
that
the
department
was
required
to
answer
until
the
date
that
17
the
department
files
its
answer.
In
the
case
of
an
appeal
of
18
a
denial
of
a
refund,
failure
to
answer
within
the
thirty-day
19
time
period,
and
after
a
request
has
been
made,
shall
result
in
20
the
accrual
of
interest
payable
to
the
taxpayer
at
double
the
21
rate
in
effect
under
section
421.7
from
the
time
the
department
22
was
required
to
answer
until
the
date
that
the
department
files
23
its
answer.
24
Sec.
6.
Section
421.60,
subsection
4,
paragraph
a,
25
unnumbered
paragraph
1,
Code
2014,
is
amended
to
read
as
26
follows:
27
A
prevailing
taxpayer
in
an
administrative
hearing
other
28
than
a
small
case
proceeding,
or
a
court
proceeding
related
to
29
the
determination,
collection,
or
refund
of
a
tax,
penalty,
30
or
interest
may
be
awarded
reasonable
litigation
costs
by
the
31
department,
state
board
of
tax
review,
or
a
court,
incurred
32
subsequent
to
the
issuance
of
the
notice
of
assessment
or
33
denial
of
claim
for
refund
in
the
proceeding,
based
upon
the
34
following:
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Sec.
7.
Section
421.60,
subsection
6,
unnumbered
paragraph
1
1,
Code
2014,
is
amended
to
read
as
follows:
2
The
burden
of
proof
with
respect
to
assessments
or
denial
3
of
refunds
in
contested
case
proceedings
and
small
case
4
proceedings
shall
be
allocated
as
follows:
5
Sec.
8.
Section
421.60,
Code
2014,
is
amended
by
adding
the
6
following
new
subsection:
7
NEW
SUBSECTION
.
11.
Small
case
proceedings.
8
a.
The
department
shall
establish
small
case
proceedings
9
to
be
used
in
lieu
of
the
contested
case
proceedings
provided
10
pursuant
to
this
Title
X
and
chapter
17A.
11
b.
The
department
shall
adopt
rules
relating
to
small
case
12
proceedings,
including
but
not
limited
to
rules
establishing
13
the
types
of
actions
of
the
director
or
department
that
shall
14
be
considered
eligible
for
appeal
to
the
director
under
the
15
small
case
proceedings,
the
amount
of
tax
at
issue
that
shall
16
be
considered
a
small
case,
and
rules
relating
to
the
transfer
17
to
small
case
proceedings
of
eligible
cases
pending
before
the
18
director
on
the
effective
date
of
this
division
of
this
Act.
19
Actions
of
the
director
or
department
under
Title
X,
subtitle
20
2,
shall
not
be
eligible
for
the
small
case
proceedings.
21
c.
Use
of
the
small
case
proceedings
shall
be
at
the
22
election
of
the
taxpayer.
The
director
may
for
good
cause
23
refuse
use
of
the
small
case
proceedings
by
a
taxpayer
that
24
otherwise
meets
the
requirements
for
use
of
the
small
case
25
proceedings.
26
d.
Notwithstanding
the
provisions
of
this
Title
X,
chapter
27
17A,
or
any
other
provision
of
law
to
the
contrary,
all
of
the
28
following
apply
to
small
case
proceedings:
29
(1)
Small
case
proceedings
shall
be
informal.
To
the
30
extent
consistent
with
the
requirements
of
due
process,
the
31
department
may
by
rule
dispense
with
or
otherwise
modify
32
provisions
relating
to
formal
contested
case
proceedings,
33
including
but
not
limited
to
the
recording
and
transcribing
of
34
proceedings,
the
creation
of
a
detailed
case
record,
ex
parte
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communications,
and
the
rules
of
civil
procedure.
1
(2)
The
presiding
officer
of
a
hearing
under
small
case
2
proceedings
shall
be
an
administrative
law
judge
assigned
by
3
the
division
of
inspections
and
appeals
in
accordance
with
the
4
provisions
of
section
10A.801.
5
(3)
The
decision
of
an
administrative
law
judge
shall
6
be
considered
the
final
action
of
the
department
under
7
chapter
17A,
and
shall
not
be
reviewed
by
the
director.
8
Notwithstanding
section
17A.19
or
any
other
provision
of
law
to
9
the
contrary,
the
decision
of
an
administrative
law
judge
in
a
10
small
case
proceeding
is
not
subject
to
judicial
review.
11
(4)
The
decision
of
an
administrative
law
judge
in
a
small
12
case
proceeding
shall
not
be
considered
as
precedent
in
any
13
other
case,
hearing,
or
proceeding.
14
(5)
The
administrative
law
judge
shall
notify
the
taxpayer
15
and
the
director
by
mail
of
the
decision.
16
e.
The
provisions
of
section
422.70
shall
also
be
applicable
17
to
an
administrative
law
judge
acting
under
the
authority
of
18
this
subsection.
19
Sec.
9.
Section
424.1,
subsection
4,
Code
2014,
is
amended
20
to
read
as
follows:
21
4.
The
board
shall
retain
rulemaking
authority,
but
may
22
contract
with
the
department
for
assistance
in
drafting
23
rules.
The
board
shall
retain
contested
case
jurisdiction
24
over
any
challenge
to
the
diminution
rate
or
cost
factor.
The
25
department
shall
conduct
all
other
contested
cases
or
small
26
case
proceedings,
whichever
is
applicable,
and
be
responsible
27
for
other
agency
action
in
connection
with
the
environmental
28
protection
charge
imposed
under
this
chapter
.
29
Sec.
10.
APPLICABILITY.
This
division
of
this
Act
applies
30
to
appeals
pending
before
the
director
of
revenue
on
January
31
1,
2015,
and
to
appeals
made
to
the
director
of
revenue
on
or
32
after
January
1,
2015.
33
DIVISION
III
34
STUDY
REPORT
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Sec.
11.
ADMINISTRATIVE
APPEALS
PROCESS
FOR
TAX
MATTERS
——
1
REPORT.
The
department
of
revenue,
in
consultation
with
the
2
department
of
management
and
other
interested
stakeholders,
3
shall
continue
to
study
the
independence,
effectiveness,
4
and
fairness
of
the
state’s
current
administrative
appeals
5
processes
for
tax
matters
and
shall
make
recommendations
6
for
changes,
if
necessary,
and
shall
additionally
study
the
7
desirability,
practicality,
and
feasibility
of
replacing
8
components
of
these
processes
with
new
administrative
appeals
9
processes
for
tax
matters
within
the
executive
branch
to
10
resolve
disputes
between
the
department
of
revenue
and
11
taxpayers.
The
department
of
revenue
shall
prepare
and
12
file
a
report,
if
necessary,
detailing
its
findings
and
13
recommendations
with
the
chairpersons
and
ranking
members
of
14
the
ways
and
means
committees
of
the
senate
and
the
house
of
15
representatives
and
with
the
legislative
services
agency
by
16
January
8,
2015.
17
EXPLANATION
18
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
19
the
explanation’s
substance
by
the
members
of
the
general
assembly.
20
This
bill
relates
to
the
department
of
revenue’s
21
administrative
appeals
process
for
tax
and
other
matters.
22
DIVISION
I
——
STATE
BOARD
OF
TAX
REVIEW.
Division
I
relates
23
to
the
state
board
of
tax
review.
The
state
board
of
tax
review
24
(board)
is
an
independent,
bipartisan
board
consisting
of
25
three
members
appointed
by
the
governor
and
confirmed
by
the
26
senate.
One
of
the
powers
and
duties
of
the
board
is
to
review
27
final
decisions
of
the
director,
including
but
not
limited
to
28
final
decisions
issued
by
the
director
in
a
contested
case.
29
The
board
also
has
the
original
jurisdiction
to
review
the
30
director’s
assessments
and
valuations
of
centrally
assessed
31
property
for
purposes
of
property
taxation,
which
means
the
32
taxpayer
appeals
the
assessment
or
valuation
of
the
director
33
directly
to
the
board.
Both
the
taxpayer
and
the
director
have
34
the
right
to
appeal
a
decision
of
the
board
to
district
court.
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The
division
amends
the
types
of
decisions
of
the
director
1
that
may
be
reviewed
by
the
board
to
specify
that
only
2
decisions
made
under
Code
Title
X,
subtitle
2
(property
taxes),
3
may
be
appealed
to
the
board.
As
a
result,
decisions
of
the
4
director
with
regard
to
income
taxes,
franchise
taxes,
sales
5
and
use
taxes,
and
various
excise
and
other
taxes
will
no
6
longer
be
appealable
to
the
board
and
must
instead
be
appealed
7
directly
to
district
court.
8
The
division
takes
effect
upon
enactment
and
applies
to
9
appeals
made
to
the
board
on
or
after
the
effective
date
of
the
10
division,
and
appeals
pending
before
the
board
on
the
effective
11
date
of
the
division
shall
be
governed
by
current
Code
section
12
421.1.
13
DIVISION
II
——
ADMINISTRATIVE
APPEALS.
Division
II
relates
14
to
the
administrative
appeals
process
of
the
department
of
15
revenue
by
authorizing
small
case
proceedings.
16
Under
current
law,
when
a
taxpayer
appeals
a
decision
of
the
17
director
and
no
settlement
can
be
reached
between
the
parties,
18
the
director
grants
a
contested
case
hearing
pursuant
to
the
19
provisions
of
Code
chapter
17A
(Iowa
administrative
procedure
20
Act).
Following
a
contested
case
decision,
the
director
issues
21
a
final
decision.
The
director
is
authorized
to
transfer
22
contested
cases
to
an
administrative
law
judge
who
presides
23
over
the
hearing
and
issues
a
proposed
decision.
When
this
24
occurs,
the
director
may
adopt
the
proposed
decision
as
the
25
final
decision
of
the
department,
or
may
reverse
or
modify
26
the
proposed
decision
according
to
the
standards
provided
in
27
the
Iowa
administrative
procedure
Act.
Following
the
final
28
decision
of
the
director,
a
taxpayer
may
appeal
the
decision
29
to
the
state
board
of
tax
review
or
may
seek
judicial
review
of
30
the
decision.
31
The
division
requires
the
department
of
revenue
to
adopt
32
small
case
proceedings
that
may
be
used
at
the
election
of
the
33
taxpayer,
and
shall
be
in
lieu
of
a
contested
case
hearing.
34
The
department
is
required
to
adopt
rules
relating
to
small
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case
proceedings,
including
but
not
limited
to
the
types
1
of
actions
of
the
director
and
amounts
of
tax
that
will
be
2
considered
eligible
for
small
case
proceedings.
The
department
3
is
also
required
to
adopt
rules
relating
to
the
transfer
to
4
the
small
case
proceedings
of
eligible
cases
pending
before
5
the
director
on
the
effective
date
of
the
division.
Actions
6
of
the
director
or
department
relating
to
property
taxes
are
7
not
eligible
for
the
small
case
proceedings.
The
department
8
may
refuse
use
of
the
small
case
proceedings
to
a
taxpayer
9
for
good
cause.
The
division
requires
small
case
proceedings
10
to
be
informal
and
allows
the
department
to
dispense
with
11
or
otherwise
modify
provisions
relating
to
formal
contested
12
case
proceedings
such
as
the
recording
and
transcribing
13
of
proceedings,
the
creation
of
a
detailed
case
record,
ex
14
parte
communications,
and
the
rules
of
civil
procedure.
The
15
presiding
officer
of
a
hearing
under
small
case
proceedings
16
shall
be
an
administrative
law
judge
assigned
by
the
department
17
of
inspections
and
appeals.
The
decision
of
the
administrative
18
law
judge
in
a
small
case
proceeding
shall
be
considered
the
19
final
action
of
the
department
of
revenue
and
shall
not
be
20
reviewed
by
the
director
or
appealed
to
district
court
by
the
21
taxpayer
or
the
director.
Furthermore,
the
decision
of
the
22
administrative
law
judge
in
a
small
case
proceeding
shall
not
23
be
considered
as
precedent
in
any
other
case,
hearing,
or
24
proceeding.
25
The
division
applies
all
the
provisions
of
Code
section
26
422.70,
relating
to
the
general
hearing
powers
of
the
director,
27
to
an
administrative
law
judge
acting
under
the
authority
of
28
the
small
case
proceedings.
29
The
division
specifies
that
the
provision
of
fees
and
30
mileage
of
witnesses,
and
the
awarding
of
litigation
costs
in
31
certain
situations,
shall
not
apply
to
small
case
proceedings.
32
APPLICABILITY.
The
division
applies
to
appeals
pending
33
before
the
director
on
January
1,
2015,
and
to
appeals
made
to
34
the
director
on
or
after
January
1,
2015.
35
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_____
DIVISION
III
——
STUDY
REPORT.
Division
III
establishes
1
a
report
to
be
prepared
and
filed,
if
necessary,
by
the
2
department
of
revenue.
The
department
of
revenue,
in
3
consultation
with
the
department
of
management
and
other
4
interested
stakeholders,
shall
continue
to
study
the
current
5
administrative
appeals
processes
for
tax
matters
and
make
6
recommendations
for
changes
if
necessary,
and
also
study
the
7
possibility
of
creating
new
administrative
appeals
processes.
8
The
report,
if
necessary,
detailing
any
recommended
changes
9
or
findings
shall
be
filed
with
the
chairperson
and
ranking
10
members
of
the
ways
and
means
committees
of
the
senate
and
the
11
house
of
representatives
and
with
the
legislative
services
12
agency
by
January
8,
2015.
A
similar
study
and
report
was
13
conducted
last
year
and
filed
on
January
8,
2014,
by
the
14
department
of
revenue.
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