1996 SUMMARY OF LEGISLATION

BUSINESS, BANKING & INSURANCE

BUSINESS, BANKING & INSURANCE LEGISLATION

SENATE FILE 376 - Regulation of Credit Unions (full text of bill)

BY COMMITTEE ON COMMERCE. This Act amends provisions relating to the regulation of credit unions and authorizes certain additional powers of credit unions.
The Act authorizes a credit union to receive payments on shares or as deposits from nonmembers, as prescribed by rule of the Superintendent of Credit Unions where the credit union is serving predominately low-income members, and from other credit unions, and federal, state, county, and city governments, in addition to payments from its members. Rules adopted relating to nonmember deposits are to be designed solely to meet the needs of the low-income members. A credit union designated as serving predominantly low-income members shall be reviewed during each examination to ensure that the credit union is continuing to meet established standards.
The Act authorizes credit unions to make deposits in state and federal savings banks or savings and loan associations, and state and federal credit unions insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund. The Act provides that data processing services and loan documentation recordkeeping functions may be performed at an authorized office or other location, subject to the approval of the superintendent.
The Act provides that the rates, terms and conditions of a loan or line of credit available to a director shall not be more favorable than the rates, terms or conditions of comparable loans or lines of credit available to the other members of the credit union. The Act increases the limit on the aggregate amount of all loans and lines of credit available to directors from 20 to 25 percent of the assets of the credit union. The Act also provides that a credit union which obtains a report or opinion by an attorney of another mortgage lender relating to defects in the title to real property is to provide a copy of the report or opinion to the mortgagor and the mortgagor's attorney.
The Act provides that at the end of each dividend period, but not less than quarterly, the gross income of a credit union is to be determined and an amount set aside as a legal reserve against losses on loans and other losses as specified by rules adopted by the Credit Union Division. The Act identifies additional assets of the credit union which are not to be considered risk assets for purposes of determining the amount of the required reserves. The Act eliminates requirements providing that shares which become fully payable during a dividend period and are outstanding at the close of the period are entitled to a proportional share of the dividend, and providing that dividend credit for a month may be accrued on shares which are or become fully paid up during the first 15 days of that month.
The Act authorizes credit unions to lease safe deposit boxes and establishes procedures related to the leasing of safe deposit boxes in a manner similar to the authority of and procedures for banks. The Act establishes procedures for searching a safe deposit box of a person who has died and for recognizing an adverse claim to property held in a safe deposit box or property held for safekeeping. The Act establishes the remedies available to a credit union for nonpayment of rent on a safe deposit box and authorizes a credit union to accept property for safekeeping.
The Act also defines the business relationship that can exist between a state-chartered credit union and the superintendent, deputy, or other employee of the Credit Union Division of the state Department of Commerce.

SENATE FILE 2123 - Insurance -- Payment of Claims by Administrator (full text of bill)

BY BARTZ. This Act provides that a claim to be paid by an administrator who collects charges or premiums from, or who adjusts or settles claims on, residents of this state in connection with life or health insurance, or certain annuities, may pay such claims on a draft, by check, or by electronic funds transfer as authorized by the insurer. Currently, such payments are to be made only on a draft and as authorized by the insurer.

SENATE FILE 2135 - Cooperative Corporations (full text of bill)

BY COMMITTEE ON AGRICULTURE. This Act provides for the organization of cooperative corporations which are eligible to hold agricultural land. The Act provides for the organization of cooperative corporations based in part on provisions contained in Chapter 499, the chapter providing for the organization of cooperative associations, and Chapter 490, the chapter providing for the organization of corporations.
The Act amends Chapter 203, the grain dealers law, to exclude a cooperative corporation organized under Chapter 501 from regulation as a grain dealer if the cooperative buys grain from producers who are members or licensed grain dealers and does not resell that grain.
The Act creates new Chapter 501 establishing cooperative corporations. Subchapter I of the new chapter provides general provisions. The Act provides definitions, including for "authorized person," which means a farming entity, an individual or general partnership that owns land and receives as rent a share of the crops or the animals, or an employee of the cooperative who performs at least 1,000 hours of service for the cooperative in a calendar year. The Act defines "farming entity" to mean a natural person or a fiduciary for a natural person who regularly participates in physical labor or management in a farming operation; or a family farm corporation, family farm limited liability company, family farm limited partnership, or family trust, as defined in Iowa's corporate farming law (Chapter 9H).
Subchapter I includes provisions including allowable purposes, duration and the powers of the cooperative corporation. The Act provides that, notwithstanding restrictions regarding corporate ownership of agricultural land contained in Section 9H.4, a cooperative corporation may, directly or indirectly, acquire or otherwise obtain or lease agricultural land in this state for as long as farming entities own 60 percent of the stock and are eligible to cast at least 60 percent of the votes at member meetings, and authorized persons own at least 75 percent of the stock and are eligible to cast at least 75 percent of the votes at member meetings. In addition, a cooperative corporation cannot either directly or indirectly acquire or otherwise obtain agricultural land if the total agricultural land directly or indirectly owned or leased by the cooperative corporation would exceed 640 acres. A cooperative corporation claiming that it is exempt from the restrictions of Section 9H.4 must file an annual report with the Secretary of State which includes information relating to the cooperative and its land holdings. The Act provides that an officer who falsifies a report is guilty of perjury, which is punishable as a class "D" felony.
Other general provisions of the subchapter include naming the cooperative corporation, executing and filing documents, paying filing fees, maintaining a registered office and an agent in the state, and keeping records and reports. The Act authorizes the Attorney General to bring an action to wind up the affairs of a cooperative not functioning as provided in the Act.
Subchapter II provides for the articles of incorporation and bylaws of a cooperative corporation. It provides for incorporation by three or more individuals, filing the initial articles of incorporation, amending and restating the articles of incorporation, and adopting bylaws. The Act provides that an amendment or restatement must be adopted by a vote of two-thirds of its membership. The board may adopt or amend the cooperative corporation's bylaws by a vote of three-fourths of the board.
Subchapter III provides for members. The Act limits liability of members, and establishes procedures for calling and holding meetings, providing notice to members, conducting meetings, voting, distributing information to members regarding the names of other members, and distributing information to members upon a member's request. The Act provides that a person who is a member owning 15 percent or more of a cooperative corporation is ineligible to be a member of any other cooperative corporation. The Act restricts a person who is a member or shareholder from owning more than one membership or share of voting stock. It provides that a person is prohibited from casting more than one vote. It requires a cooperative corporation to make available financial information to its membership.
Subchapter IV provides for the management of a cooperative corporation by a board of directors and officers. Specifically, the Act provides for the election of directors, vacancies and the filling of vacancies, and for board action, including providing for quorum requirements, regular board meetings, special board meetings, the establishment of committees, the conduct of meetings, and action that may be taken without a meeting. The Act also prohibits conflicts of interests and provides for their resolution. The Act provides for the appointment of officers and their powers and duties. It provides standards of conduct for a director or officer based upon a standard of good faith and reasonable prudence. The Act limits the personal liability of directors and officers, and provides for the indemnification of former directors, officers, employees, and agents.
Subchapter V provides for the capital structure of the cooperative corporation. The Act provides for the issuance and transfer of classes of stock or fractional shares. It limits a member's right to sell or otherwise transfer stock to any person who has not been approved by the board. The Act provides for the termination of membership by the articles of incorporation or bylaws, and the redemption of the terminated member's stock. The Act provides for the distribution of the cooperative's net earnings, and requires the board to annually dispose of the cooperative's earnings in excess of its operating expenses, including by the payment of dividends, providing a reserve for depreciation, and increasing the cooperative's retained savings.
Subchapter VI provides for conversion, merger, sale, and dissolution of the cooperative corporation. The Act provides procedures for accomplishing a conversion from the provisions of another chapter. Members must approve the plan of conversion by a two-thirds vote, and dissenting members may demand payment of their interest. The Act provides that a cooperative corporation may merge or consolidate with other entities under the chapter. It provides that the cooperative corporation may provide for the sale of a cooperative corporation's assets, or mortgage, pledge, encumber, sell, lease, exchange, or otherwise dispose of its property. Under the Act, disposal of all of a cooperative corporation's property requires the approval of two-thirds of the members. The Act provides for the dissolution of the cooperative corporation in the same manner as provided for a corporation in Sections 490.1401 through 490.1440.

SENATE FILE 2270 - Letters of Credit -- Uniform Commercial Code (full text of bill)

BY COMMITTEE ON COMMERCE. This Act relates to letters of credit, by rewriting Article 5 of the Uniform Commercial Code, as recommended by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. According to the Prefatory Note to the Model Act, the primary goals of rewriting Article 5 include conforming the Article to current customs and practices, accommodating new forms of such letters, maintaining the inexpensiveness and efficiency of such instruments, and resolving conflicting court decisions.
The Act applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit. The Act governs the effect of the issuance of, amendment to, cancellation of, and duration of a letter of credit. A letter of credit which states that it is perpetual expires five years after its stated date of issuance, or after the date on which it is issued, if there is no stated date of issuance. The Act establishes the rights, duties and obligations of the parties to the letter of credit. The Act sets forth options for honoring or dishonoring the letter of credit for an issuer and an applicant when either of the parties claims that a required document is fraudulent or forged.
The Act establishes warranties of the beneficiary in addition to those warranties contained in other articles of the Uniform Commercial Code, and establishes the remedies of the parties associated with the wrongful dishonor of a letter of credit or a breach of an obligation associated with the letter of credit. The Act provides for the transfer and assignment of a letter of credit. The Act also provides for procedural aspects under the Article including the statute of limitations for bringing a cause of action associated with a letter of credit, the choice of law and the forum for such action, and for the subrogation of rights.
The Act also makes conforming amendments to existing Code provisions which are necessary as a result of the enactment of this Act.

SENATE FILE 2282 - Open-End Credit Accounts -- Disclosure Requirements (full text of bill)

BY COMMITTEE ON COMMERCE. This Act provides that a creditor is not required to deliver or mail to the consumer a written disclosure of a change in the terms of an open-end credit account if the change involves a decrease in the rate of the finance charge, a decrease in a delinquency charge, or a decrease in an over-limit charge. Section 537.3205 currently provides that a creditor may make a change in the terms of an open-end credit account applying to any balance incurred after the effective date of the change only if the creditor delivers or mails to the consumer a written disclosure of the change at least 60 days before the effective date of the change, whether or not such change is authorized by a prior agreement.

SENATE FILE 2283 - Cooperative Associations -- Miscellaneous Provisions (full text of bill)

BY COMMITTEE ON COMMERCE. This Act relates to member voting, the distribution of earnings, and the bylaws of a cooperative association. The Act eliminates the provision requiring a member's vote, made in writing in advance of a membership meeting, to be signed by the member and accompanied by a copy of the notice of the proposition being voted on. This change allows a member to cast a secret absentee vote on issues that come before a membership meeting of a cooperative association and then attend the membership meeting without invalidating the absentee ballot.
The Act amends the provision prohibiting additional earnings from being added to the surplus of a cooperative association when the surplus exceeds either 50 percent of the total of all capital paid in for stock or membership, or $1,000, whichever is greater, by authorizing the membership, by a majority of votes cast, to approve such an addition.
The Act provides that the members of a cooperative association may adopt, alter, amend, or repeal the bylaws of the cooperative association provided that 10 days' prior written notice of the impending membership vote is mailed to all members of the association with a copy or summary of the proposed change. The Act provides that proposals by members to change the bylaws of the cooperative association by vote of the membership must be presented to the cooperative association's registered office for mailing to the membership by the association at least 20 days prior to the meeting at which the proposed change is to be considered.

SENATE FILE 2353 - Satellite Terminals (full text of bill)

BY COMMITTEE ON COMMERCE. This Act amends provisions relating to the requirements for satellite terminals. Section 527.5 provides that a satellite terminal is to be available for use on a nondiscriminatory basis by any other financial institution which has its principal place of business within this state, and by all customers who have been designated by a financial institution using the satellite terminal and who have been provided with an access device, approved by the administrator, by which to engage in electronic transactions by means of the satellite terminal.
The Act provides that the nondiscriminatory access provision of Section 527.5 applies to a financial institution whose licensed or principal place of business is located in a state other than Iowa, whether or not the financial institution has a business location in this state, if all satellite or other similar-type terminals of such financial institution are available on a reciprocal basis to each financial institution with a principal place of business in this state and to each financial institution with a business location in this state which complies with this provision and allows such access.
The Act also strikes the prohibition on the operation of a satellite terminal in a manner to permit a person to deposit funds into any account representing a liability of a financial institution or an industrial loan company if the business location of the institution or company where the original records pertaining to such account are maintained is located outside of this state.

SENATE FILE 2363 - Securities Regulation (full text of bill)

BY COMMITTEE ON COMMERCE. This Act amends various provisions in Chapter 502, which is referred to as the "Iowa Uniform Securities Act." The chapter is under the supervision of the Administrator of the Securities Bureau of the Insurance Division of the Department of Commerce.
The Act expands the definition of "security" regulated under the chapter to include an interest in a limited liability company. The Act expands exemptions from registration and filing requirements to include an issuer whose securities are exempt because they are listed on the National Association of Securities Dealers Automated Quotations National Market System (NASDAQ/NMS). The Act eliminates an automatic exemption for securities listed on the Midwest Stock Exchange and the Pacific Coast Stock Exchange. The Act adds a requirement that a security must be subject to certain reporting requirements if the security is to be exempt from registration and filing requirements because the security was issued by an issuer which has a class of securities currently registered under the Securities Exchange Act of 1934. The Act provides that the Administrator of the Securities Bureau may exempt other securities or transactions from the registration and filing requirements of the chapter.
The Act expands the methods by which a registrant may notify the Securities Bureau of a federal registration statement to include electronic transmissions. The Act eliminates institutional buyers from the list of persons with whom an out-of-state broker-dealer may do business in this state without being required to be licensed.
The Act extends the time for review of an application for a license as a broker-dealer or agent from 30 to 60 days before a license must be granted, unless a denial order is in effect or a denial, revocation or suspension proceeding is pending.
The Act provides that disciplinary sanctions, including suspension or revocation of a registration, censure or the imposition of civil penalties, may be imposed upon a person who impedes the Securities Bureau from conducting an audit, examination, inspection, or investigation or who refuses the Securities Bureau access to any office or location within an office to conduct an audit, examination, inspection, or investigation.
The Act provides that if an applicant or registrant has abandoned an application or registration, the Administrator of the Securities Bureau may enter an order of abandonment and limit or eliminate further consideration of the application or registration. The Act provides procedures for notifying the applicant or registrant prior to issuing the order.
The Act provides that the withdrawal from registration of a broker-dealer or agent becomes effective prior to the standard 30-day period following an application to withdraw, as determined by the Administrator of the Securities Bureau if a proceeding to deny the registration is instituted, in the same manner as a proceeding to suspend or revoke a registration.
The Act provides that in cases where there is a civil remedy for a person aggrieved by a fraudulent practice under the chapter, a copy of the legal action or arbitration action must be served upon the Administrator of the Securities Bureau within 20 days of the filing of such action. The Act also provides that a failure to comply with this provision does not invalidate the action.
The Act provides that the Securities Bureau may be awarded both prejudgment and postjudgment interest if a person fails or refuses to file a statement or report or to produce materials as ordered by the administrator, or to obey a subpoena issued by the administrator, and the administrator or Attorney General applies to district court to enforce compliance.

SENATE FILE 2368 - Investment Securities -- Uniform Commercial Code (full text of bill)

BY COMMITTEE ON COMMERCE. This Act provides for investment securities by rewriting Article 8 of the Uniform Commercial Code, as recommended by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. The Act provides commercial law rules applicable to investment securities, including the holding of investment securities directly by investors or by persons on behalf of investor clients. The Article is divided into multiple parts.
Part 1 deals with definitions and general matters affecting the Article. This includes provisions for determining whether certain obligations and interests are securities; the acquisition of security or financial assets; procedures for notice of an adverse claim; control; indorsements, instructions and entitlement orders; warranties involving direct holding; warranties in indirect holding; applicability and choice of law; clearing corporations; a creditor's legal processes; statutes of frauds; evidentiary rules concerning certificated securities; securities intermediaries; and securities intermediaries as purchasers for value.
Parts 2 through 4 deal with the rights of persons who hold securities directly. Under the Act, a person who holds a security through a broker or securities custodian has a security entitlement governed by Part 5, and is not considered the direct holder of the security. Part 2 is largely unchanged from current Iowa law. It deals with certain obligations of issuers. According to the Prefatory Note to the Model Act, the primary purpose of the provisions of Part 2 is to apply to investment securities the principles of negotiable instruments law that preclude the issuers of negotiable instruments from asserting defenses against subsequent purchasers. Part 2 provides for issuers; an issuer's responsibility and defenses; notice of defect or defense based on staleness; the effect of an issuer's restriction on a transfer; the effect of an unauthorized signature on a security certificate; completion or alteration of a security certificate; the rights and duties of an issuer; the effect of a signature of an authenticating trustee, registrar or transfer agent; an issuer's lien; and overissue.
Part 3 deals with a transfer for securities held directly. This part applies to investment securities provisions regulating negotiable instruments that protect purchasers of negotiable instruments against adverse claims. The part provides for delivery; the rights of purchasers; protected purchasers; indorsement; instructions; the effect of guaranteeing a signature, indorsement or instruction; and a purchaser's rights.
Part 4 deals with the process of registration of transfer by the issuer or transfer agent. The part provides for the duty of an issuer to register a transfer; an assurance that an indorsement or instruction is effective; a demand that an issuer is not registering a transfer; wrongful registration; the replacement of a lost, destroyed or wrongfully taken security certificate; an obligation to notify an issuer of a lost, destroyed or wrongfully taken security certificate; and an authenticating trustee, transfer agency or registrar.
Part 5 applies specifically to the indirect holding of securities, when one person holds securities on behalf of another. Part 5 provides for the rights and property interest associated with a security entitlement. The Act provides that a person acquires a security entitlement when a securities intermediary credits the financial asset to the person's account. A securities intermediary is a clearing corporation or a person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others. A "clearing agency" includes a Federal Reserve bank or any other person that provides clearance settlement services with respect to financial assets and is required to register as such under the federal securities laws. Specifically, the part provides for securities accounts and the acquisition of a security entitlement from a securities intermediary; the assertion of an adverse claim against an entitlement holder; the property interest of an entitlement holder in a financial asset held by a securities intermediary; the duties of a securities intermediary to maintain financial assets, regarding payments and distributions, to exercise rights as directed by an entitlement holder, to comply with an entitlement order, and to change an entitlement holder's position to another form of security holder; securities intermediaries and others; the rights of a purchaser of securities entitlements from entitlement holders; and priority among security interests and entitlement holders.
Along with the revision of Article 8, the Act provides related changes in Articles 1, 4, 5, 9, and 10, including a number of changes concerning security interests in Article 9. Conforming amendments to Articles other than Article 9 include amendments to Article 1 providing general provisions applicable to the entire chapter, and specifically to provisions relating to the territorial application of the chapter, and provisions relating to the statute of frauds for kinds of personal property; amendments to Article 4 providing for bank deposits and collections; amendments to Article 5 providing for letters of credit, and specifically provisions relating to an issuer's duties and rights; and amendments to Article 10 providing for the chapter's effective date and repealer, and specifically for the application of Article 8. Article 9 provides for secured transactions and specifically amends provisions relating to the perfection of security interests in multiple state transactions; provisions relating to definitions; specific definitions for accounts and general intangibles; provisions relating to investment property; provisions relating to security interests arising in purchase or delivery of financial assets; provisions relating to attachments and enforceability of security interests; provisions relating to persons who take priority over unperfected security interests; provisions relating to requirements when filing is required to perfect a security interest; provisions relating to the perfection of security interests; provisions relating to the perfection of security interests in documents and goods covered by documents; provisions relating to possession by a secured party perfecting a security interest without filing; provisions relating to a secured party's right of disposition of collateral; provisions relating to the protection of purchasers of instruments, documents and securities; and provisions relating to priorities among conflicting security interests in the same collateral.
The Act makes conforming changes to other Code provisions, including Chapters 511 and 518A regulating life insurance companies, and Chapter 633, the Iowa Probate Code.
The Act takes effect July 1, 1997.

SENATE FILE 2395 - Insurance Regulation -- Risk-Based Capital Requirements (full text of bill)

BY COMMITTEE ON COMMERCE. This Act amends provisions relating to capital and surplus requirements for insurance companies and establishes measures of risk-based capital for purposes of regulating insurance companies in this state.
The Act establishes a new Chapter 521E relating to standards and measurements of risk-based capital. The chapter requires a domestic insurer to annually file with the Commissioner of Insurance a report of the insurer's risk-based capital level as of the end of a calendar year. In addition to the commissioner, the report must be filed with the National Association of Insurance Commissioners and with the insurance commissioner in each state in which the insurance company is authorized to do business. The chapter defines how the risk-based capital is determined for a life and health insurer and for a property and casualty insurer. The chapter defines a company-action-level event and a regulatory-control-level event and establishes steps the insurer must take as a result of the event. The chapter defines an authorized-control-level event, upon the occurrence of which the commissioner may take action in the same manner as if a regulatory-control-level event has occurred, or may take action to place the insurer under supervision or other regulatory control. The chapter also defines a mandatory-control-level event, upon the occurrence of which the commissioner is to take the necessary action to place the insurer under supervision or other regulatory control. The chapter exempts a domestic property and casualty insurer from the application of the chapter if the insurer writes direct business only in this state, writes direct annual premiums of not more than $1 million, and does not assume reinsurance in an amount in excess of 5 percent of the insurer's direct written premium.
The Act also provides that the capital and surplus requirements for stock life insurance companies, mutual life insurance companies, insurance companies other than life insurance companies, mutual insurance companies other than life insurance companies, foreign stock insurance companies other than life insurance companies, foreign mutual insurance companies other than life insurance companies, and reciprocals are the greater of the capital and surplus requirements applicable to such insurers as established in existing Code sections prior to the Act or the applicable capital and surplus requirements under new Chapter 521E.

SENATE FILE 2408 - Financial Institution Eligibility for State Public Funds (full text of bill)

BY COMMITTEE ON COMMERCE. This Act amends Chapter 12C, which relates to the deposit of public funds by striking references to the annual community reinvestment report filed pursuant to federal law, as that statement is no longer required. A financial institution seeking to qualify for the deposit of state public funds is to provide annually a written statement to the committee that develops the list of eligible institutions, indicating that the financial institution has a commitment to community reinvestment consistent with the safe and sound operation of a financial institution, unless the financial institution has received a rating of satisfactory or higher pursuant to the federal Community Reinvestment Act. The rating is to be certified to the committee by the Superintendent of Banking. Currently, all financial institutions must provide the statement in order to qualify for the deposit of state public funds. Language relating to the availability of the financial institution's annual community reinvestment disclosure statement to the public is also stricken.
Under Section 12C.6A, the committee receives challenges to a financial institution's continued eligibility to receive state public funds. Two of the factors considered by the committee are amended by the Act. First, the committee is to look at practices of the financial institution intended to discourage application for home mortgages, small business loans, small farm loans, community development loans and, if consumer lending is a substantial majority of the financial institution's business, consumer loans. Currently, the committee is to look at practices intended to discourage application for types of credit set forth in the Community Reinvestment Act statement, which will no longer be required. Language is also stricken that grants the committee the authority to specify which state and federal business and economic development programs participated in by the financial institution are to be included in an annual statement.
The Act also amends Section 12C.6 by adding the Superintendent of Credit Unions to the committee that develops the list of financial institutions eligible to accept state public funds deposits and which also establishes a minimum rate to be earned on such deposits. Currently, the committee is composed of the Superintendent of Banking, the Auditor of State or a designee, and the Treasurer of State.

SENATE FILE 2422 - Instruments Affecting Real Estate -- Corporate Seal Requirement (full text of bill)

BY COMMITTEE ON JUDICIARY. This Act removes the requirement that a corporation which has adopted a corporate seal affix it to all documents it executes affecting real estate. The Act also deletes from the acknowledgment form the requirement of including an indication of whether the corporation has adopted a seal. The Act legalizes instruments, executed before the effective date of this Act, July 1, 1996, that are more than one year old and do not have a corporate seal affixed.

HOUSE FILE 230 - Music Licensing Fees (full text of bill)

BY HEATON AND BRUNKHORST. This Act regulates the relationship between businesses and performing rights societies that license the public performance of a nondramatic musical work on behalf of a copyright owner, including the American Society of Composers, Authors and Publishers; Broadcast Music, Inc.; and the Society of European Stage Authors and Composers, Inc.
The Act prohibits a performing rights society from entering onto the business premises for the purpose of discussing a contract for the payment of royalties, unless the society identifies itself.
The society must provide the proprietor of the business with a schedule of the rates and terms of royalties under the contract. The proprietor may review a list of the members or affiliates represented by the society and a listing of the copyrighted nondramatic musical or similar works in the performing rights society's repertory. The Act provides that a contract involving the payment of royalties must be in writing, be signed by the parties, and contain information regarding the proprietor and the society, the terms of the contract, including the contract's duration, and a schedule of rates and terms of the royalties to be collected under the contract. A person who suffers from a violation of the Act may bring an action to recover actual damages and reasonable attorney's fees and to seek an injunction or any other available remedy.

HOUSE FILE 511 - Credit Cards -- Miscellaneous Provisions (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act amends provisions of the Consumer Credit Code relating to open-end credit obtained pursuant to a credit card issued by a creditor entitling the cardholder to purchase or lease goods or services from at least 100 persons not related to the card issuer.
The Act provides that a creditor and a cardholder may contract for an over-limit charge up to $15. Currently, that charge is limited to $10. The Act strikes language prohibiting credit unemployment insurance from being sold in conjunction with an application for, or renewal of, a credit card.
The Act also provides that the creditor and the cardholder may contract for a delinquency charge on any payment which is not paid in full when due in an amount up to $15. Currently, payment must be made within 10 days after the due date and the charge is limited to $10. The Act further provides that a delinquency charge with respect to a deferred payment shall not be collected unless the payment is not paid in full on or before its deferred due date. Currently, such payment must be made within 10 days after its deferred due date to avoid the delinquency charge.

HOUSE FILE 2036 - Reorganization of Telephone Companies as Cooperative Associations (full text of bill)

BY KREMER. This Act provides that a telephone company organized as a corporation under Chapter 491 and qualifying, pursuant to an Internal Revenue Service letter ruling under I.R.C. § 501(c)(12), as a nonprofit corporation entitled to distribute profits in a manner similar to a Chapter 499 cooperative association may reorganize as a cooperative association under Chapter 499 upon the affirmative vote of two-thirds of the votes cast by a majority of all shares entitled to vote.

HOUSE FILE 2127 - Individual Property Management Accounts -- Examination Exemption (full text of bill)

BY DODERER. This Act exempts an individual property management account, which is maintained in the name of the owner or owners and used for conducting ongoing property management, from the requirement that each real estate broker authorize the Iowa Real Estate Commission to examine each trust account maintained by the broker and obtain the certification of the financial institution attesting to the trust account and consenting to the examination. The exemption applies to these accounts whether the property management is conducted by the property owner or by an agent or manager when the account is part of a property management agreement between the property owner and the agent or manager.

HOUSE FILE 2152 - Regulation of Multiple Employer Welfare Arrangements (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act extends the repeal date for the exemption of certain multiple employer welfare arrangements from regulation by the Insurance Division of the Department of Commerce, when specified requirements are met, from July 1, 1996, to July 1, 1997.
The Act takes effect April 1, 1996.

HOUSE FILE 2202 - Real Estate Brokers and Salespersons -- Permissible Acts (full text of bill)

BY COMMITTEE ON STATE GOVERNMENT. This Act exempts from the provisions of Chapter 543B the actions of a nonlicensed employee of a licensed real estate broker or salesperson who provides information to another licensee concerning the sale, exchange, purchase, rental, lease, or advertising of real estate, when the information has been provided to the employee by the employer licensee either verbally or in writing.
The Act also provides that a licensed real estate broker or salesperson is prohibited from acting in a transaction on the licensee's own behalf, on behalf of the licensee's immediate family or brokerage, or on behalf of an organization or business entity in which the licensee has an interest, unless the licensee has provided written disclosure of the interest to all parties to the transaction. Previously, the licensee had to have the consent of all parties to the transaction before acting in the transaction.

HOUSE FILE 2211 - Investments by Life Insurance Companies (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act increases the percentage of the legal reserve of a life insurance company that may be invested in certain corporate obligations from 50 to 75 percent. Corporate obligations to which this limitation applies include obligations of corporations incorporated in the United States and Canada which meet certain statutory requirements and are not issued by public utility corporations.

HOUSE FILE 2247 - Public Accounting Fees (full text of bill)

BY COMMITTEE ON STATE GOVERNMENT. This Act establishes limitations on when a commission or a contingent fee may be paid to a certified public accountant or an accounting practitioner.
The Act amends Section 542C.3 by striking contingent fees from the list of items concerning which the Accountancy Examining Board is to adopt rules. The section is also amended by striking language prohibiting the acceptance of a commission, brokerage or other participation in the fees, charges or profits of work recommended or turned over to the laity as incident to services for clients.
The Act also amends Section 542C.3 by creating a new subsection that relates to the fees and commissions which a certified public accountant or accounting practitioner may accept. The new subsection provides that a certified public accountant or accounting practitioner shall not for a commission recommend or refer to a client any product or service, shall not for a commission recommend or refer any product or service to be supplied by a client, and shall not receive a commission from a client, when the certified public accountant or accounting practitioner, or a person associated with the certified public accountant or accounting practitioner in the practice of public accounting, also performs certain other identified services for that client. The new subsection also prohibits a certified public accountant or accounting practitioner from accepting a contingent fee from a client if certain other identified services are performed for the client, and prohibits the acceptance of a contingent fee for the preparation of an original or amended tax return or claim for a tax refund.

HOUSE FILE 2310 - Insurance Regulation -- Miscellaneous Provisions (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act amends several provisions regarding insurance regulation and related to setoff of premium, fraudulent submissions to insurers, availability of certain information to insurers, length of term of the board of directors of an insurer, and notice of cancellation with respect to automobile liability insurance.
The Act amends Section 507C.30 to provide that a person has a right to set off premium due to or from an insurer pursuant to a reinsurance contract.
The Act amends Section 507E.3 to provide that it is a class "D" felony for a person, with the intent to defraud an insurer, to present or cause to be presented to an insurer a written document or oral statement as part of an application for insurance coverage, knowing that the document or statement contains false information regarding a material fact. The Act amends Section 507E.7 to provide that a person is not liable civilly as a result of filing a report or furnishing other information concerning alleged acts violating Chapter 507E, Insurance Fraud, if the report or other information is filed or furnished without malice, fraudulent intent or bad faith to an authorized representative of an insurer. Currently, this immunity applies to a report or other information filed or furnished to law enforcement officials, the National Association of Insurance Commissioners, the Insurance Division of the Department of Commerce, a federal or state governmental agency or bureau established to detect and prevent fraudulent insurance acts, or any other organization established for such purpose.
The Act amends Section 515.29 to extend the term of a class of a board of directors of an insurance company from three to five years. The Act amends Section 515.51 to provide that a policy or contract of insurance authorized under Chapter 515, Insurance Other Than Life Insurance, delivered in this state must be an individual policy or contract form.
The Act also amends Section 515D.4 to provide that coverage under a policy of automobile liability insurance may be canceled if the named insured or another operator who either resides in the same household or customarily operates an automobile insured under the policy engaged in a speed contest during the term of the policy while operating an automobile insured under the policy; or during the 36 months immediately preceding the notice of cancellation or nonrenewal was convicted of or forfeited bail for criminal negligence resulting in a death, homicide or assault which arose out of the operation of a motor vehicle; for operating a motor vehicle while intoxicated or while under the influence of a drug; or for leaving the scene of a motor vehicle accident without stopping to report the accident.

HOUSE FILE 2363 - Mutual Insurance Holding Companies (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act amends Section 521A.14, which relates to the reorganization of a domestic mutual insurance company into a mutual insurance holding company and continuing the corporate existence of the reorganizing insurance company as a stock insurance company.
The Act authorizes foreign mutual insurance companies or certain foreign health service corporations to reorganize by merging the policyholders' or subscribers' membership interests, as applicable, into a mutual insurance holding company in the same manner as a domestic mutual insurance company may reorganize.
The Act provides that a majority of the voting shares of the capital stock of the reorganized insurance company, which is required to be owned by a mutual insurance holding company, shall not be conveyed, transferred, assigned, pledged, subjected to a security interest or lien, encumbered, or otherwise hypothecated or alienated by the mutual insurance holding company or intermediate holding company. Any such transaction in or on the majority of the voting shares of the reorganized insurance company, which is required to be owned by the mutual insurance holding company, is void in inverse chronological order of the date of such transaction as to the shares necessary to constitute a majority of such voting shares. The Act provides that the ownership of a majority of the voting shares of the capital stock of the reorganized insurance company, which are required to be owned by a parent mutual insurance holding company, includes indirect ownership through one or more intermediate holding companies in a corporate structure approved by the commissioner.

HOUSE FILE 2369 - Postdelivery Benefits and Care (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act establishes postdelivery care requirements under third-party health policies and contracts for mothers and newborns. The Act prohibits an individual or group policy of accident or health insurance, an individual or group hospital or health care service contract, or an individual or group health maintenance organization contract which is delivered, amended or renewed on or after July 1, 1996, which provides maternity benefits which are not limited to complications of pregnancy, or newborn care benefits, from terminating inpatient benefits or requiring discharge of a mother or newborn from a hospital following delivery earlier than determined to be medically appropriate by the attending physician after consultation with the mother and in accordance with guidelines which are adopted as rules by the Commissioner of Insurance. The guidelines are to be consistent with or are to adopt by reference the guidelines for perinatal care established by the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists. These guidelines provide for a minimum postdelivery stay, exclusive of the day of delivery, of 48 hours for a vaginal birth and 96 hours for a cesarean birth.
Additionally, if a discharge is made prior to the minimum postdelivery stay, a postdischarge visit is to be provided to the mother and newborn if determined medically appropriate by the attending physician and in accordance with the guidelines. The Act also requires those specified policy or contract providers to use the guidelines in performing utilization review of inpatient hospital services related to maternity and newborn care, and prohibits deselection, required additional documentation, required additional utilization review, termination of services to, reduction in payment to, or any other manner of disincentive to an attending physician based solely on the attending physician's compliance with the guidelines. Finally, the Act prohibits the requiring of preauthorization or precertification for a hospital stay or for a postdischarge follow-up visit in accordance with the guidelines.

HOUSE FILE 2370 - Limited Liability Companies and Corporations -- Miscellaneous Provisions (full text of bill)

BY COMMITTEE ON JUDICIARY. This Act amends provisions applicable to limited liability companies and corporations.
The Act provides that transfers of real estate in connection with a merger, consolidation or reorganization of a limited liability company are exempt from the real estate transfer tax.
The Act provides that after the occurrence of an event requiring dissolution of a limited liability company, the approval of the remaining members of the company to continue the company must occur within 90 days of the event. A dissolution event includes the loss of a member due to death, retirement or expulsion.
The Act provides that corporations and limited liability companies operating under trade names are exempt from the requirement that the trade names be registered with the county recorder in each county in which business is to be conducted by the corporation or limited liability company.
The Act also amends provisions relating to business corporations and the duties of the Secretary of State.
The Act strikes the application for a certificate of existence from the list of forms the Secretary of State may prescribe and furnish. The Act also strikes the requirement that the Secretary of State return a document which the secretary refuses to file within 10 days after the document was received.
The Act requires that a domestic or foreign corporation which intends to use the name of another domestic or foreign corporation must submit documentation to the satisfaction of the Secretary of State establishing one of the existing conditions under the section.
The Act strikes the requirements that a change of registered office or registered agent filed by a domestic or foreign corporation include the street address of the corporation's current registered office or the name of its current registered agent.
The Act strikes the requirement that a registered agent of a domestic or foreign corporation who resigns send two copies of the statement of resignation to the Secretary of State for the secretary to deliver to the registered office and principal office of the corporation, and requires the registered agent to send a copy of the statement by certified mail to the principal office of the corporation. The Act provides that the agency appointment is terminated on the date the statement is filed with the Secretary of State, rather than 31 days after that date, as currently provided.
The Act provides that a corporation may be served pursuant to Section 490.504, as provided in other sections of Chapter 490, Business Corporations, or as provided in Sections 617.3 through 617.6, unless the manner of service is otherwise specifically provided by statute.
The Act strikes the reference to "certificate of incorporation" and inserts "acknowledgment of receipt of document." The Act strikes the requirement that the Secretary of State forward the articles of incorporation to the county recorder where the principal place of business of the corporation is to be located.
The Act provides that the Secretary of State may proceed to administratively dissolve a corporation if the corporation does not pay the filing fee for an annual report within 60 days after the fee is due. The Act strikes from the lists of items which may result in the Secretary of State commencing a proceeding to administratively revoke the certificate of authority of a foreign or domestic corporation, the failure of the corporation to pay any franchise taxes or penalties within 60 days after they are due.
The Act provides that the Secretary of State's administrative dissolution of a corporation appoints the secretary to be the corporation's agent for service of process in any proceeding based on a cause of action which arose during the time the corporation was authorized to transact business in this state. The Act does not preclude service on the registered agent of the dissolved corporation.
The Act strikes language which permits the corporation to state in the reinstatement application that the ground or grounds for administrative dissolution did not exist, and strikes the requirement that the corporation include in the application the corporation's state tax identification number and provides that the corporation include the corporation's federal tax identification number.
The Act requires the certificate of existence, which is to be filed by a foreign corporation applying for a certificate of authority to transact business in this state, to be filed within 90 days of the date of the filing of the completed application.
The Act deletes the requirement that a foreign corporation seeking to withdraw from the state include in the application for withdrawal a commitment to notify the Secretary of State in the future of any change in the corporation's mailing address.
The Act specifically delineates the officers whose names and addresses must appear in the annual report. The Act strikes items currently required to be included in the annual report, including the total number of authorized shares, itemized by class and series, if any, within each class; the total number of issued and outstanding shares, itemized by class and series, if any, within each class; a statement of the amount of agricultural land in this state owned by the corporation; and a statement that the corporation is or is not a family farm corporation as defined in Section 9H.1.

HOUSE FILE 2397 - Linked Investments (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act makes changes to the Linked Investments Program in the Office of the Treasurer of State. The Act provides that an eligible borrower under the Linked Investments Program includes any person, corporation, cooperative, partnership, or municipality qualified to participate in a linked investments program. Previously, only persons who were in the business or entering the business of producing, processing or marketing horticultural crops or nontraditional crops were eligible borrowers. The Act, though, establishes a separate linked investment loan program for horticultural and nontraditional crops.
The Act permits the Treasurer to renew certificates of deposit under the program for up to eight one-year periods after the initial one-year period. In addition, the Act authorizes the Treasurer to reject a linked investment package due to the unavailability of state funds or a lack of compliance with program requirements by an eligible borrower or eligible lending institution.
The Act places a moratorium on new linked investments starting April 4, 1996, and ending June 30, 1997, for the Targeted Small Business Linked Investments Program and repeals the Main Street Linked Investments Loan Program. Current linked investments may be renewed, however.
The Act takes effect April 4, 1996.

HOUSE FILE 2409 - Bank Regulation and Related Matters (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act amends Chapter 524, relating to the regulation and operation of banks. The Act addresses additional changes relating to major changes and clarifications made during the 1995 Session and addresses issues relating to federal legislation concerning interstate branch banking, which becomes effective June 1, 1997.
The Act amends the definition of "bank" to exclude federally chartered entities other than a national bank. The Act eliminates the $20 maximum on receipts that may be accepted by an educational bank and clarifies that an accredited school which is permitted to participate in an educational bank must be an elementary or secondary school.
The Act prohibits certain personnel of the Banking Division of the Department of Commerce from obtaining a loan from affiliates of certain entities regulated by the division. The Act prohibits certain banking personnel from participating in decisions or other regulatory actions related to an affiliate of a regulated entity if such personnel have credit relations with the affiliate. The Act also prohibits the general counsel of the division from borrowing from certain regulated entities and their affiliates. The Act provides that records of the division and certain personnel of the division may be examined or subpoenaed, where relevant, in an action brought to recover moneys for a loss in connection with an indemnity bond, which was the result of embezzlement, misappropriation or misuse of state bank funds by a director, officer or employee of the bank. The Act also provides that the annual statement to be provided to the Superintendent of Banking concerning the bank's condition must be submitted in the format prescribed by the superintendent, rather than on forms to be supplied by the superintendent.
The Act strikes the requirement that the articles of incorporation of a state bank be acknowledged. The Act provides that the minimum capital requirements of a state bank apply to the total capital structure of the bank. The Act provides that a state bank incorporated on or after July 1, 1995, is to establish paid-in surplus and undivided profits as required by the superintendent. The Act provides that the board of a state bank is to require additional auditing procedures deemed necessary by the board not less than once each calendar year.
The Act permits an executive officer of a state bank to obtain loans and extensions of credit for amounts secured by bonds, notes, certificates of indebtedness, or treasury bills of the United States or by other such obligations fully guaranteed by the United States as to principal and interest, and for amounts secured by unconditional takeout commitments or guarantees of the federal government or a corporation wholly owned by the federal government. The Act provides that a loan or extension of credit to a corporate group must comply with additional existing requirements, which currently apply to single individual borrowers, in addition to aggregate capital maximums.
The Act includes a trust company subsidiary in the definition of a state bank's "affiliates" for purposes of the succession of fiduciary accounts and to permit the succession of those accounts to such trust company affiliates. The Act permits original loan documentation recordkeeping functions to be located at a location other than a state bank's authorized bank office with the approval of the superintendent.
The Act provides that a state bank may acquire, establish, maintain, operate, retain, or relocate a branch or an office in a state other than Iowa upon application to and approval by the superintendent. The superintendent is to supervise and regulate all out-of-state branches and offices of a state bank. However, the provision does not authorize or permit a state-chartered bank located outside this state or a national bank located outside this state to establish a de novo branch or office in this state. This provision also does not authorize or permit an interstate merger transaction as defined in federal statute before June 1, 1997.
The Act provides, with respect to united community bank offices, that a bank which results from the conversion of a state or federal savings association, or which is chartered solely for the purpose of acquiring control of a bank located in this state, is deemed to have been in existence and operation as a bank for the combined periods of existence and operation of the bank and the association from which it was converted or for the same period of time as the bank acquired.
The Act amends several provisions relating to bank holding companies. The Act requires a bank holding company that proposes to acquire a state or federal bank to provide a copy of the application submitted to the Federal Reserve Board for permission to take such action to the Superintendent of Banking. The Act provides that an out-of-state bank or out-of-state bank holding company is prohibited from acquiring control of, or acquiring all or substantially all of the assets of, a bank located in this state unless the bank has been in continuous existence and operation for at least five years. The Act provides that an authorization for a state bank to engage in insurance sales does not grant an out-of-state bank holding company that acquires a state bank the authority to engage in the sale of insurance outside of this state.
The Act exempts a nonprofit organization qualifying for tax-exempt status under the Internal Revenue Code and offering housing services to low and moderate income families from the provisions of Chapter 535B, which pertains to the regulation of mortgage bankers and brokers.
The Act also repeals provisions related to regional banking.

HOUSE FILE 2453 - Regulation of Industrial Loan Companies (full text of bill)

BY COMMITTEE ON COMMERCE AND REGULATION. This Act amends provisions relating to industrial loan companies regulated under Chapter 536A. The Act requires a person who proposes to purchase or otherwise acquire, directly or indirectly, any of the outstanding shares of an industrial loan company which would result in a change of control, to first apply to the Superintendent of Banking for a certificate of approval.
The Act provides for the appointment of the Superintendent of the Federal Deposit Insurance Corporation (FDIC) as receiver of an industrial loan company for purposes of liquidating the assets of the industrial loan company. If the FDIC pays or makes available for payment the insured deposit liabilities of such company, the FDIC is subrogated to the rights of the owners of such deposits.
The Act also requires that an industrial loan company which sells senior debt to the general public in the form of thrift certificates, installment thrift certificates, certificates of indebtedness, promissory notes, or similar evidences of indebtedness obtain insurance on the debt instruments from a federal deposit insurance agency. An industrial loan company selling such debt instruments on January 1, 1996, may continue to do so without obtaining such insurance until there is a change in control of the industrial loan company that occurs on or after that date. The Act provides that if there is a change in control after January 1, 1996, and the industrial loan company has sold senior debt instruments which are not insured by a federal deposit insurance agency, the instruments which do not have a stated maturity date must be redeemed within six months of the date of the change of control and the instruments with stated maturity dates must be redeemed on their stated maturity dates.
A person who violates a provision of this Act is guilty of a serious misdemeanor as provided in Section 536A.27.

HOUSE FILE 2498 - Miscellaneous Insurance Division Regulatory Provisions (full text of bill)

BY COMMITTEE ON WAYS AND MEANS. This Act amends provisions relating to the regulatory authority of the Division of Insurance over prearranged funeral contracts, cemeteries and business opportunities.
The Act grants the Commissioner of Insurance the authority to adopt a shorter form of annual report and waive the receipt of any or all of the information currently required to be included in the annual report of a person entering into an agreement for the sale of funeral services or funeral merchandise, or cemetery merchandise. The shorter form may be used for all establishments or for establishments meeting specified criteria, as determined by the commissioner. The Act provides that the annual report of such persons and the annual report of a financial institution which accepts funds under a trust agreement related to such sales may be made in an electronic format.
The Act provides a time period of one year for an initial sales permit required for a person to enter into an agreement to furnish upon the death of a person funeral services or merchandise, or for an initial sales permit required for a person to enter into an agreement to furnish upon the death of a person cemetery merchandise. Such permits may be renewed for a period of four years for a renewal fee of $20.
The Act provides that the Attorney General or the commissioner may keep confidential the information obtained in the course of an investigation under Chapter 523A (Funeral Services and Merchandise) or 523E (Cemetery Merchandise). The commissioner may share such information with other regulatory authorities or governmental agencies, or publish such information if the commissioner determines that disclosure is in the public interest.
The Act provides that a permit issued under either Chapter 523A or 523E is revoked 30 days following a sale of the establishment to which the permit is issued if prior notice of the sale is not filed with the commissioner. The Act authorizes the commissioner to seek an injunction or subpoena under Chapter 523A or 523E in the same manner as the Attorney General is currently authorized. The commissioner is also authorized to apply to the district court for a receivership, as appropriate under each chapter.
The Act repeals provisions in Chapters 523A and 523E which require that a seller of funeral services and merchandise and a seller of cemetery merchandise are to maintain a fidelity bond or insurance policy covering losses resulting from a dishonest or fraudulent act committed by an employee of the seller which causes a loss, theft or misappropriation of cash, property or a negotiable instrument submitted to the seller pursuant to an agreement for the purchase of such services and merchandise.
The Act amends the powers of the administrator under Chapter 523B with respect to business opportunity promotions, to permit a person receiving a cease and desist order from the administrator to file a written request for a hearing within 14 days of the date of the order rather than 14 days after receipt of the order. The administrator is authorized to bring an action in district court and seek an order of rescission, or disgorgement, including prejudgment and postjudgment interest, against a person violating a provision of Chapter 523B or a rule adopted under this chapter. The Act provides that the Attorney General or the commissioner may keep confidential the information obtained in the course of an investigation under Chapter 523B. However, the commissioner may share such information with other regulatory authorities or governmental agencies, or publish information if the commissioner determines that such disclosure is in the public interest.
The Act excludes a service contract, guarantee or warranty issued by a manufacturer, third party or retail company, covering the repair, maintenance or replacement of individual appliances or items of merchandise and sold by a retail company, in the ordinary course of business, from the provisions of Chapter 523C, relating to the regulation of residential service contracts.
The Act strikes the filing fee of $20 for a person making application for a permit to operate as a perpetual care cemetery and to sell or offer interment rights to the public. The Act also extends the period of validity of such permits from one to four years.
The Act also exempts political subdivisions operating perpetual care cemeteries from the requirement of establishing a minimum perpetual care and maintenance guarantee fund of $25,000. The Act also provides that an entity which must maintain a perpetual care and maintenance guarantee fund need not file an annual report unless specifically required by the district court.

HOUSE FILE 2499 - Unclaimed Property -- Miscellaneous Provisions (full text of bill)

BY SIEGRIST AND SCHRADER. This Act provides for changes in the definitions, reporting and remittance guidelines in Chapter 556 relating to the disposition of unclaimed property.
The Act broadens the definition of "business association" to include mutual funds, investment companies, limited liability companies, trust companies, and not-for-profit organizations. "Property" is defined in the Act as a fixed and certain interest or right in an intangible that is held, issued or owned in the course of business, or by a government or governmental entity, including income or increment therefrom. A list of types of interests evidencing property ownership or rights is provided.
The Act provides reporting guidelines for holders of traveler's checks, money orders, banking and financial organization instruments, stocks, and other intangible interests in business associations. The duration that unclaimed amounts due or payable may remain outstanding before being considered abandoned are specified, together with the required form of communication for maintaining an interest during that time, and the circumstances under which service charges may be imposed.
The Act additionally provides for the remittance of unclaimed property by the holder of the property upon filing a report of abandoned property with the State Treasurer, as currently required. Securities or security entitlements under Article 8 of the Uniform Commercial Code can be ordered transferred, remitted or disposed of by the Treasurer of State on behalf of the apparent owner. An issuer, holder or any transfer agent, or individuals acting on their instructions, shall not be liable to the apparent owner of the property and shall be indemnified against claims in accordance with Section 556.14.

RELATED LEGISLATION

SENATE FILE 284 - Forgery and Related Matters (Complete summary under CORRECTIONS, CRIMINAL LAW & PROCEDURE.)

This Act creates criminal and civil penalties for persons who possess, or employers who hire or continue to employ persons knowing that the persons possess, forged documents relating to the person's entry into or as evidence of authorized stay or employment in the United States.

SENATE FILE 482 - Economic and Other Penalties for Criminal Activity (Complete summary under COURTS, CIVIL LAW & PROCEDURE, & PROBATE.)

This Act creates Chapter 706A, the Ongoing Criminal Conduct Act, which establishes violations for economic crimes or facilitation of economic crimes; Chapter 706B, the Iowa Money Laundering Act, which guides the application of financial remedies and allows reciprocal agreements encouraging interstate cooperation and uniformity; Chapter 529, the Iowa Financial Transaction Reporting Act, which parallels federal financial transaction reporting requirements; and Chapter 809A, the Iowa Forfeiture Reform Act, which replaces the current forfeiture provisions in Chapter 809.

SENATE FILE 2157 - Postsecondary Schools and Loan Programs (Complete summary under SEE EDUCATION.)

This Act augments the requirements for registration by a postsecondary school in Iowa and increases the registration fees.

SENATE FILE 2212 - Timber Buyers (Complete summary under NATURAL RESOURCES & OUTDOOR RECREATION.)

This Act amends the definition of "timber buyer" to include a person who contracts to harvest timber on shares and revises the formula for determining the amount of surety bond required from a timber buyer to do business in this state.

SENATE FILE 2218 - Community Health Management Information System (Complete summary under HEALTH & SAFETY.)

This Act relates to the Community Health Management Information System (CHMIS), which is administered by a nonprofit organization and is under the regulatory authority of the Insurance Division of the Department of Commerce. This system provides for the collection and submission of health care billing information and other data.

SENATE FILE 2305 - Purchase Money Mortgages (Complete summary under COURTS, CIVIL LAW & PROCEDURE, & PROBATE.)

This Act provides additional rights to holders of purchase money mortgages regarding notice and priority of the mortgage.

SENATE FILE 2324 - Miscellaneous Public Assistance Provisions and Related Matters (Complete summary under HUMAN SERVICES.)

This Act makes numerous changes to public assistance provisions and includes changes to individual development accounts available in financial institutions to certain persons with low income.

SENATE FILE 2337 - Regulation of Grain Dealers -- Receivership (Complete summary under AGRICULTURE.)

This Act amends Chapter 203, which provides for the regulation of grain dealers by the Department of Agriculture and Land Stewardship. The Act provides in part that the department may administer grain and grain-related assets of a grain dealer as a receiver, if the grain dealer's license is revoked or suspended or there is evidence that the grain dealer has engaged in business without obtaining a license.

SENATE FILE 2370 - Energy Efficiency and Public Utility Regulation (Complete summary under ENERGY & PUBLIC UTILITIES.)

This Act repeals existing energy efficiency requirements for rate-regulated gas and electric utilities and instead requires implementation of cost-effective energy efficiency plans, requires maintenance of a principal office for Iowa operations within the state, creates an alternate energy revolving loan fund, and prohibits a rate-regulated utility from providing services that are recoverable in the regulated rates.

SENATE FILE 2396 - Exemptions From Execution -- Residential Deposits and Prepaid Rent (Complete summary under COURTS, CIVIL LAW & PROCEDURE, & PROBATE.)

This Act adds to the list of property that a debtor may hold exempt from execution, residential and utility security deposits and prepaid rent, not to exceed $500 in the aggregate. However, the debtor cannot claim these exemptions against a landlord or utility company for sums held under a rental agreement or for utility services.

SENATE FILE 2449 - Tax Revisions and Related Matters (Complete summary under TAXATION.)

Division IV of this Act allows resident shareholders of value-added Subchapter S corporations that do business within and without the state to recompute their individual income tax and claim a refund of tax paid if the recomputation is a lower amount. The recomputation will allocate the resident shareholder's share of the Subchapter S corporation's income and expenses, as is done for corporate income tax purposes, rather than all the resident's share of the income and expenses being taxed. There is a $5 million limitation on the aggregate amount of refund claims for each tax year. If claims exceed $5 million, each claim will be prorated and this prorated amount will be the amount of the taxpayer's refund.
The Division applies retroactively to January 1, 1996, for tax years beginning on or after that date.

SENATE FILE 2455 - Tax Administration and Related Matters (Complete summary under TAXATION.)

This Act allows the Director of Revenue and Finance to establish criteria allowing the use of electronic filing for any return, deposit or document required to be filed for tax administration purposes as well as for the payment of taxes, penalties and interest.

SENATE FILE 2470 - Miscellaneous Appropriations and Related Matters -- Economic Development Appropriations (Complete summary under APPROPRIATIONS.)

This Act relates to public levy, expenditure and regulatory matters by making standing, economic development and other appropriations, and includes provisions regarding the classification of long distance telephone companies for certain tax purposes and provisions affecting E911 regulation.

HOUSE FILE 569 - Motor Vehicle Lease Tax (Complete summary under TAXATION.)

This Act imposes a 5 percent tax upon the use of a leased motor vehicle. The tax is based upon the value of the motor vehicle during the period of the lease rather than on the overall value of the motor vehicle. The Act applies to leases entered into on or after January 1, 1997.

HOUSE FILE 2001 - Exemption From Motor Carrier Safety Rules (Complete summary under TRANSPORTATION.)

This Act extends an exemption from federal motor carrier safety regulations relating to physical and medical qualifications for drivers of commercial vehicles engaged in intrastate commerce if the driver's physical or medical condition existed prior to July 29, 1996.
This Act takes effect on April 4, 1996.

HOUSE FILE 2066 - Operation of Motor Vehicles in Border Cities (Complete summary under TRANSPORTATION.)

This Act allows an exemption from existing length and weight limitations for trucks using Interstate 29 between Sioux City, Iowa, and the border between Iowa and South Dakota and for trucks using Interstate 129 between Sioux City, Iowa, and the border between Iowa and Nebraska.

HOUSE FILE 2144 - Third-Party Payment of Certain Health Care Providers (Complete summary under HEALTH & SAFETY.)

This Act relates to the payment of physician assistants and licensed advanced registered nurse practitioners under third-party health policies or contracts.

HOUSE FILE 2166 - Taxation of Foreign Corporations (Complete summary under TAXATION.)

This Act lists activities that a foreign corporation may engage in and not be considered as doing business in Iowa for Iowa corporate tax purposes.

HOUSE FILE 2229 - Employment Security (Complete summary under LABOR & EMPLOYMENT.)

This Act makes several changes concerning unemployment insurance benefits.

HOUSE FILE 2365 - Investments by Fiduciaries (Complete summary under COURTS, CIVIL LAW & PROCEDURE, & PROBATE.)

This Act permits fiduciaries to invest and reinvest in open-end and closed-end management investment companies and investment trusts registered under the federal Investment Company Act of 1940 so long as the portfolio of such investment company or investment trust consists substantially of investments not otherwise prohibited by the Model Prudent Person Investment Act or by the governing instrument.

HOUSE FILE 2416 - Appropriations -- Administration and Regulation (Complete summary under APPROPRIATIONS.)

This Act relates to and appropriates $84.1 million from the General Fund of the State to various state departments, agencies, funds, and certain other interstate and national entities for FY 1997.

HOUSE FILE 2432 - Taxation of Organized Health Care Delivery Systems (Complete summary under TAXATION.)

This Act provides that payments received by an organized health care delivery system licensed by the Director of Public Health shall be taxed in the same manner as payments received by a health maintenance organization.

HOUSE FILE 2433 - Waste Tires (Complete summary under ENVIRONMENTAL PROTECTION.)

This Act relates to the management of waste tires by providing for the establishment of a Waste Tire Management Fund. The Act also encourages retail tire dealers who currently charge a fee for disposal of used tires to include the fee within the sales price of new tires.

HOUSE FILE 2500 - Uneconomical Testamentary Trusts (Complete summary under COURTS, CIVIL LAW & PROCEDURE, & PROBATE.)

This Act adds a new section to the probate code, permitting a court to modify or terminate a testamentary trust upon petition by a beneficiary or a trustee, and after notice to all interested parties, when the value of the trust has become so low in comparison to the administration costs that it impairs the purpose of the trust.

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