Iowa Department of Transportation

News Release

April 22, 2008

  TIME-21 bill signed today to secure funding for transportation infrastructure

AMES, Iowa – The Iowa Department of Transportation is pleased that Governor Chet Culver today signed Senate File 2420, which will secure new funding for Iowa's transportation system.

“As Governor, one of my top priorities has been to build on Iowa 's strengths in education, manufacturing and agriculture and financial services to create jobs in every corner of the state,” said Governor Culver. “The good news is the jobs are coming, but we must have the infrastructure in place to keep pace and grow our economy. Today, we're taking another essential step toward doing just that.”

The following paragraphs explain key provisions of the bill.

Extends constitutional protection to more funds supporting Iowa 's roadways Motor vehicle use tax, which is currently assessed at a rate of 5 percent of the purchase or leased price of a vehicle, is repealed under SF2420 and replaced with a “fee for new registration” at the same rate. Under the Constitution of the State of Iowa , Article VII , Section 8, motor vehicle registration fees shall be used exclusively for the construction, maintenance and supervision of the public highways. Use tax is not covered by the state Constitution.

Allocates revenues to the TIME-21 Fund
Deposits revenue from the increase in fees collected from trailer registrations, certificates of title and salvage certificates of title, and the revenues collected from annual vehicle registration fees in excess of $392 million, in the TIME-21 Fund. House File 932 (TIME-21 Fund Act), enacted during the 2007 legislative session, allocates revenues from the TIME-21 Fund to the Primary Road Fund (60%), Secondary Road Fund (20%) and City Street Fund (20%). The Act provides that the Fund will sunset on June 30, 2028.

Elongates the schedule applicable to reducing registration fees for cars and multi-purpose vehicles and increases the minimum vehicle registration fee
The formula used to calculate annual registration fees for cars and multi-purpose vehicles is based on a vehicle's value and weight. The registration fee is gradually reduced as the vehicle ages to a minimum flat fee. SF2420 elongates the period of declining fees and increases the minimum flat fee to $50. The schedule change will take effect Jan. 1, 2009. Owners of motor vehicles registered prior to that date will not pay more than they currently pay for motor vehicle registration.

Increases pickup truck registration fees, establishes a “business-trade” truck vehicle classification and increases the minimum registration fee for 3-ton pickups
Beginning with model year 2010 vehicles, a pickup (defined as a 3-, 4- or 5-ton truck) will be assessed a registration fee based on the weight/value formula that applies to cars and multi-purpose vehicles.

An owner who applies to register a vehicle as a business-trade truck is required to provide proof or affirm that the vehicle is eligible to be registered as a business-trade truck. The truck must be owned by a corporation, limited liability company, or partnership or by a person who files a schedule C or schedule F form for federal income tax purposes and must be eligible for depreciation under the Internal Revenue Code.

Business-trade trucks will be assessed a flat vehicle registration fee based on the vehicle's registered weight. For a business-trade truck weighing 3 tons or less, the annual registration fee is $150, for up to 4 tons $165, and for up to 5 tons $180. The registration fee for a 3-ton business-trade truck declines to a minimum flat fee of $50 for a vehicle 12 model years or older. (This flat fee schedule also applies to model year 2009 or older 3-, 4- and 5-ton trucks that are purchased or transferred after January 1, 2009.) The bill does not affect current pickup truck owners.  

Increases registration fees for other trucks registered based on combined gross weight Annual registration fees are increased for trucks exceeding 5 tons, but not exceeding 9 tons that are purchased or transferred on or after January 1, 2009.

Increases registration fees for special trucks for farm use The annual registration fee for a special truck for farm use will increase. If the registration is a renewal for a special truck registered to the same owner prior to January 1, 2009, the annual registration fees will remain the same.

Increases motor vehicle title fees
Effective Jan. 1, 2009, motor vehicle title fees will increase from $10 to $20. Salvage and lemon law title fees will increase from $2 to $10.

Increases trailer registration fees
Effective Jan. 1, 2009, the registration fee increases from $10 to $20 for trailers 2,000 pounds or less and from $10 to $30 for trailers over 2,000 pounds. This provision of the bill applies to all trailers, regardless of ownership prior to the effective date.

Increases travel trailer registration fees
Effective Jan. 1, 2009, travel trailer registration fees will increase from $.20 per square foot to $.30 per square foot. This provision of the bill applies to all travel trailers, regardless of ownership prior to the effective date.

Increases motorcycle rider education fee
The motorcycle rider education fee will be increased from $1 to $2 per year of motorcycle license validity. Revenues for the fee shall be deposited in the Motorcycle Rider Education Fund.

The bill requires the Iowa Department of Transportation (Iowa DOT) to conduct an analysis of the additional revenues necessary to provide at least $200 million annually to the TIME-21 Fund by FY2012. The report is to be submitted to the governor and General Assembly by Dec. 31, 2008.

The bill also requires the Iowa DOT, in cooperation with the Office of Energy Independence and Department of Natural Resources to study public transit improvements needed to meet state energy independence goals and the needs of Iowa 's growing senior population, including a review of current transit revenues and the sufficiency of those revenues to meet future needs. The report is to be submitted to the governor and General Assembly by Dec. 1, 2009.


Fiscal Impact by Fund

(Estimate prepared by the Legislative Services Agency, April 15, 2008 Fiscal Note)


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