ARC 7501C

ARC 7501C

MANAGEMENT DEPARTMENT[541]

Adopted and Filed

Rulemaking related to suspension and reinstatement of state funds

The Department of Management hereby rescinds Chapter 13, "Suspension and Reinstatement of State Funds," and adopts a new chapter with the same title, and rescinds Chapter 16, "Suspension and Reinstatement of State Funds," Iowa Administrative Code.

Legal Authority for Rulemaking

This rulemaking is adopted under the authority provided in Iowa Code chapters 27A and 27B.

State or Federal Law Implemented

This rulemaking implements, in whole or in part, Iowa Code chapters 27A and 27B.

Purpose and Summary

Chapter 13 establishes procedures and guidelines to deny state funds to a local entity intentionally violating the provisions of Iowa Code chapter 27A and to reinstate eligibility funds when a local entity comes into compliance. The Department rescinded Chapter 16 and transferred applicable language to Chapter 13. The two chapters are similar, and it is more straightforward to include all sanctuary city language in a single chapter.

Public Comment and Changes to Rulemaking

Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on November 15, 2023, as ARC 7120C. Public hearings were held on December 6, 2023, at 1 p.m.and December 8, 2023, at 1 p.m.in Room G14, State Capitol, 1007 East Grand Avenue, Des Moines, Iowa. No one attended the public hearings. No public comments were received. No changes from the Notice have been made.

Adoption of Rulemaking

This rulemaking was adopted by the Department on December 20, 2023.

Fiscal Impact

This rulemaking has no fiscal impact to the State of Iowa.

Jobs Impact

After analysis and review of this rulemaking, no impact on jobs has been found.

Waivers

Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 541—1.3(8).

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee's meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

Effective Date

This rulemaking will become effective on February 14, 2024.

The following rulemaking action is adopted:

Item 1. Rescind 541—Chapter 13 and adopt the following new chapter in lieu thereof:

CHAPTER 13

SUSPENSION AND REINSTATEMENT OF STATE FUNDS

541—13.1(27A) Definitions. For purposes of this chapter:

"City" means a municipal corporation but does not include a county, township, school district, or any special-purpose district or authority.

"County" means an administrative subdivision in the state governed by a locally elected board of supervisors and may be comprised of subdivisions, including cities, townships, school districts, or any special-purpose district or authority.

"Declaratory judgment" means a judgment issued by a district court declaring a local entity is in full compliance with Iowa Code chapter 27A or 27B.

"Department" means the Iowa department of management pursuant to Iowa Code chapter 8.

"Final judicial determination" means a district court ruling on a civil action brought by the state attorney general's office finding a local entity to have violated the provisions of Iowa Code chapter 27A or 27B.

"Fiscal year" means the time period beginning on July 1 and ending the following June 30 as defined in Iowa Code section 8.36.

"Governing body" means the mayor and city council of a city or the board of supervisors of a county.

"Local entity" means the same as defined in Iowa Code section 27A.1(4) or 27B.1(1).

"State agencies" means any boards, commissions, or departments, as defined by Iowa Code section 7E.4, or other administrative offices or units of the executive branch of the state.

"State funds" means those funds held by the state that originate from revenues, fees or receipts collected by the state and distributed to local entities. Funds held by the state that are not defined as state funds include:

1.Federal funds (unless provided to the state and awarded as a grant by the state).

2.Funds paid out per gubernatorial or presidential emergency proclamation.

3.Any revenue collected and administered by the state on behalf of a local entity due to a locally imposed tax, fee or fine.

4.Any state funds for the provision of wearable body protective gear used for law enforcement purposes.

5.Payment for public protection, utilities, or goods and services.

6.Payment of settlements.

7.Setoffs as defined by Iowa Code section 8A.504.

541—13.2(27A) Denial of state funds. State funds are denied to a local entity in circumstances authorized by Iowa Code section 27A.9(2) or 27B.5(2).

13.2(1) The department will send written notification to each state agency to deny state funds. Payments will continue to be made to the local entity until the beginning of the state fiscal year that begins after the date on which a final judicial determination is made, at which time payments will be denied.

13.2(2) If the local entity receives state funds through the county, the department will notify the county so that any needed changes may be made to apportionment systems for property tax credits, exemptions and replacements.

13.2(3) State agencies will contact federal granting agencies in writing to determine how to administer federal funds when state match funds are denied. State agencies may be obligated to discontinue drawing federal funds or issue repayments as instructed by federal granting agencies.

13.2(4) Funds will continue to be denied until the court issues a declaratory judgment declaring that the local entity is in full compliance with Iowa Code chapter 27A or 27B.

541—13.3(27A) Reinstatement of eligibility to receive state funds. In circumstances authorized by Iowa Code section 27A.10(3) or 27B.6(3), the local entity's eligibility to receive state funds is reinstated.

13.3(1) The department will send written notification to each state agency to reinstate state funds. Payments will be reinstated to the local entity beginning on the first day of the month following the date on which the declaratory judgment is issued.

13.3(2) State agencies will contact federal partners in writing to determine how to reinstate the drawdown of federal funds when state match funds are reinstated.

These rules are intended to implement Iowa Code chapters 27A and 27B.

Item 2. Rescind and reserve 541—Chapter 16.

[Filed 12/20/23, effective 2/14/24]

[Published 1/10/24]

Editor's Note: For replacement pages for IAC, see IAC Supplement 1/10/24.