Opinion ID: 2219370
Heading Depth: 1
Heading Rank: 3

Heading: Scope of the Department's Discretion

Text: The first issue is whether the department had authority to interpret Iowa Code section 422.43(11). We start from the proposition that the department has no inherent power and has only such authority as is conferred by statute or is necessarily inferred from the power expressly granted. [2] Schmidt v. Iowa State Bd. of Dental Exam'rs, 423 N.W.2d 19, 21 (Iowa 1988). The question then is whether the legislature expressly granted to the department the authority to interpret Iowa Code section 422.43(11). The 1992 enactment of Iowa Code section 422.43(11) imposed a sales tax on gross receipts derived from a number of different services, including sewage services for nonresidential commercial operations. When the legislature added the provision of sewage services to the list of services for which the city shall collect a sales tax on the gross receipts, the legislature did not define the term sewage services. Iowa Administrative Code rule 70126.72(3) provides, Retailers obligated to collect the tax. Counties, municipalities, sanitary districts, or any other persons which provide sewage services to nonresidential commercial operations are obligated to collect Iowa sales tax upon the gross receipts from the rendering, furnishing, or performing of sewage services to those operations. Iowa Admin. Code r. 70126.72(3). Because the legislature did not define sewage services, the department enacted Iowa Administrative Code rule 70126.72(1)( a ) defining the term. The department interpreted sewage services as the service of collecting rainwater and other liquid and solid refuse or excreta for drainage or purification by means of pipes, channels, or conduits usually placed underground. Iowa Admin. Code r. 70126.72(1)( a ). In section 422.68 the legislature empowered the department to administer and enforce the rules of chapter 422. The general enabling statute gives the department the power and authority to prescribe all rules not inconsistent with the provisions of [chapter 422], necessary and advisable for its detailed administration and to effectuate its purposes. Iowa Code § 422.68 (2001) (emphasis added). The adoption of administrative rules which amend or nullify legislative intent exceeds the department's authority. Sorg v. Iowa Dep't of Revenue, 269 N.W.2d 129, 131 (Iowa 1978). Given the broad language of the enabling statute, the scope of the department's authority is expressly comprehensive. The statute says the department is charged with the responsibility of administering the provisions of chapter 422. The statute also expressly delegated to the department the rule making powers necessary to enforce the laws. Bearing in mind the practical considerations involved in the legislature's vesting the department with discretion to enforce the laws, it follows the department has authority to define terms necessary to fulfill its responsibility. When the department interpreted section 422.43(11), it did so pursuant to the enabling statute. We will grant relief only if the department's interpretation was unreasonable, arbitrary, or capricious or characterized by an abuse of discretion. Iowa Code § 17A.19(8)( g ).