Text: HSB00515 Text: HSB00517 Text: HSB00500 - HSB00599 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 523G.3, subsection 2, Code 1999, is 1 2 amended by striking the subsection. 1 3 Sec. 2. Section 523G.3, Code 1999, is amended by adding the 1 4 following new subsections: 1 5 NEW SUBSECTION. 6A. "Fund" means the invention developer 1 6 administration and enforcement fund created pursuant to 1 7 section 523G.3C. 1 8 NEW SUBSECTION. 10. "Office" means the secretary of 1 9 state's office as provided in chapter 9. 1 10 Sec. 3. NEW SECTION. 523G.3A POWERS AND DUTIES OF THE 1 11 OFFICE AND THE ATTORNEY GENERAL. 1 12 1. The office shall administer and enforce the provisions 1 13 of this chapter and may do all of the following: 1 14 a. Adopt rules necessary to administer and enforce this 1 15 chapter in accordance with chapter 17A. 1 16 b. Investigate the business and business records of 1 17 invention developers and conduct necessary investigations. 1 18 c. Administer oaths and affirmations, subpoena witnesses, 1 19 receive evidence, and require the production of business 1 20 records relating to an investigation. 1 21 d. Apply to district court for the issuance of an order 1 22 requiring a person's appearance before the office, if the 1 23 person has refused to obey a subpoena issued by the office. 1 24 The person may also be required to produce documentary 1 25 evidence germane to the subject of the investigation. A 1 26 failure to obey a court order under this subsection 1 27 constitutes contempt of court. 1 28 e. Issue an order directed at an invention developer to 1 29 cease and desist from engaging in an act which is in violation 1 30 of this chapter or a rule adopted by the office. The order 1 31 shall be based on an investigation which provides reasonable 1 32 evidence of a violation. The office may apply to district 1 33 court in order to enforce the order. A failure to obey a 1 34 court order under this subsection constitutes contempt of 1 35 court. 2 1 2. Upon request of the office, the attorney general may 2 2 assist the office by bringing a legal action necessary in 2 3 order to carry out the provisions of this section. 2 4 Sec. 4. NEW SECTION. 523G.3B REQUIREMENTS FOR 2 5 REGISTRATION. 2 6 1. The following are requirements for registration under 2 7 this chapter: 2 8 a. An invention developer shall file a registration 2 9 statement with the office not later than May 1 of each year. 2 10 The registration statement shall contain all of the following 2 11 information: 2 12 (1) The name and address of the invention developer. 2 13 (2) The name and address of each owner, officer, or other 2 14 official of the invention developer's business. However, if 2 15 the invention developer is a corporation, the registration 2 16 statement shall contain the names and addresses of the chief 2 17 executive officer and the members of the board of directors. 2 18 (3) A description of the invention development services 2 19 offered. 2 20 (4) A copy of each form of contract used by the invention 2 21 developer. 2 22 (5) A copy of the invention developer's most recent 2 23 financial statement, including balance sheets and related 2 24 statements of income of the invention developer, prepared in 2 25 accordance with generally accepted accounting principles, 2 26 audited by a certified public accountant, and dated not more 2 27 than twelve months prior to the date of the application. 2 28 (6) The total number of customers who have contracted with 2 29 the invention developer in this state during the invention 2 30 developer's preceding fiscal year. 2 31 (7) The invention developer's gross income from the 2 32 invention development business in this state during the 2 33 invention developer's preceding fiscal year. 2 34 (8) The number of customers who have received from the 2 35 invention developer's services an amount of money in excess of 3 1 the amount of money paid by those customers to the invention 3 2 developer pursuant to a contract. The amount received by a 3 3 customer reported on the statement shall only include income 3 4 earned from the successful development, promotion, licensing, 3 5 publishing, exhibiting, or marketing of the customer's 3 6 invention pursuant to the contract executed between the 3 7 invention developer and the customer. 3 8 b. The invention developer shall submit an annual 3 9 registration fee accompanying the registration statement to 3 10 the office in the amount of two hundred fifty dollars. The 3 11 fee shall be deposited into the invention developers 3 12 administration and enforcement fund as provided in section 3 13 523G.3C. 3 14 c. The invention developer shall submit a copy of evidence 3 15 of financial responsibility as required by section 523G.6 3 16 accompanying the registration statement. 3 17 2. The office shall issue a certificate of compliance to 3 18 an invention developer who has complied with the registration 3 19 requirements of this section. 3 20 Sec. 5. NEW SECTION. 523G.3C INVENTION DEVELOPERS 3 21 ADMINISTRATION AND ENFORCEMENT FUND. 3 22 1. An invention developers administration and enforcement 3 23 fund is created in the state treasury under the control of the 3 24 office. The fund is composed of registration fees collected 3 25 by the office pursuant to section 523G.3B, and moneys 3 26 appropriated by the general assembly or available to and 3 27 obtained or accepted by the office from the United States or 3 28 private sources for placement in the fund. 3 29 2. Moneys in the fund are subject to an annual audit by 3 30 the auditor of state. The fund is subject to warrants written 3 31 by the director of revenue and finance, drawn upon the written 3 32 requisition of the secretary of state or a person designated 3 33 by the secretary of state. 3 34 3. Moneys in the fund are appropriated to the office and 3 35 shall be used exclusively for purposes necessary in order to 4 1 administer and enforce the provisions of this chapter as 4 2 determined by the office, and may be used to reimburse 4 3 expenses incurred by the attorney general in bringing a legal 4 4 action pursuant to this chapter. 4 5 4. The office shall not in any manner directly or 4 6 indirectly pledge the credit of the state. 4 7 5. Section 8.33 shall not apply to moneys in the fund. 4 8 Notwithstanding section 12C.7, moneys earned as income, 4 9 including as interest, from the fund shall remain in the fund 4 10 until expended as provided in this section. 4 11 Sec. 6. Section 523G.4, subsection 2, Code Supplement 4 12 1999, is amended by adding the following new paragraph: 4 13 NEW PARAGRAPH. d. A copy of a current registration 4 14 certificate issued pursuant to section 523G.3B. 4 15 Sec. 7. Section 523G.6, subsections 1 and 2, Code 1999, 4 16 are amended to read as follows: 4 17 1. An invention developer shall maintain as security 4 18 evidence of financial responsibility as approved by the 4 19commissioneroffice. The security shall be either a bond or 4 20 cash deposit in an amount which is equal to the greater of 4 21 either ten percent of the invention developer's gross income 4 22 from the invention development business in this state during 4 23 the invention developer's preceding fiscal year, or twenty- 4 24 five thousand dollars. Thecommissioneroffice shall approve 4 25 the security before the invention developer renders or offers 4 26 to render invention development services in this state. The 4 27 invention developer shall have ninety days beginning on the 4 28 first day of the invention developer's new fiscal year to 4 29 change the security as necessary to conform to the 4 30 requirements of this subsection. 4 31 2. A surety who issues a bond must be approved by the 4 32commissioneroffice. A copy of the bond shall be filed in a 4 33 manner and according to procedures approved by the 4 34commissioneroffice. A cash deposit shall be filed with the 4 35 treasurer of state in a manner and according to procedures 5 1 approved by the treasurer of state in consultation with the 5 2commissioneroffice. The treasurer of state shall not refund 5 3 a deposit until sixty days following either the date that the 5 4 invention developer has ceased doing business in the state or 5 5 a bond has been filed with thecommissioneroffice in 5 6 compliance with this section. 5 7 Sec. 8. Section 523G.9, subsection 7, Code 1999, is 5 8 amended to read as follows: 5 9 7. A violation of this chapter or a rule adopted by the 5 10commissioneroffice pursuant to this chapter is a violation of 5 11 section 714.16. The remedies and penalties provided by 5 12 section 714.16, including but not limited to provisions 5 13 relating to injunctive relief and penalties, apply to 5 14 violations of this chapter. 5 15 Sec. 9. Section 523G.9, Code 1999, is amended by adding 5 16 the following new subsection: 5 17 NEW SUBSECTION. 8. Upon request of the office, the 5 18 attorney general may institute a legal proceeding on behalf of 5 19 the state against a person in order to enforce the provisions 5 20 of this chapter. 5 21 Sec. 10. ADMINISTRATION AND ENFORCEMENT. The division of 5 22 insurance and the secretary of state shall cooperate in order 5 23 to efficiently transfer authority to administer and enforce 5 24 this chapter by January 1, 2001. The secretary of state's 5 25 office shall adopt rules necessary and to be effective by 5 26 January 1, 2001, in order to administer and enforce this 5 27 chapter. 5 28 Sec. 11. DIRECTIONS TO IOWA CODE EDITOR. The Iowa Code 5 29 editor shall, unless impracticable, transfer chapter 523G, as 5 30 amended by this Act, to a new chapter within title I, subtitle 5 31 4, of the Code. 5 32 Sec. 12. 1992 Iowa Acts, chapter 1114, section 13, is 5 33 repealed. 5 34 Sec. 13. EFFECTIVE DATES. 5 35 1. Except as provided in subsection 2, this Act takes 6 1 effect January 1, 2001. 6 2 2. Sections 10 and 11 of this Act, being deemed of 6 3 immediate importance, takes effect upon enactment. 6 4 EXPLANATION 6 5 In 1992 the general assembly enacted S.F. 2189 (1992 Iowa 6 6 Acts, ch. 1114), the "Invention Development Services Act", 6 7 which provides for the protection of inventors from persons 6 8 who offer to develop inventions. The provisions are codified 6 9 in Code chapter 523G under the administration of the insurance 6 10 commissioner. The original bill provided that several 6 11 provisions relating to evidence of financial responsibility, 6 12 enforcement and penalty provisions, and powers provided to the 6 13 commissioner to administer and enforce the provisions are 6 14 contingent upon an appropriation of moneys and the allocation 6 15 of full-time equivalent positions. In 1998, the general 6 16 assembly enacted H.F. 2271 (1998 Iowa Acts, ch. 1119, } 6) 6 17 which repealed Code provisions which provided for registration 6 18 requirements and administrative and enforcement authority to 6 19 the commissioner. 6 20 This bill provides that the secretary of state's office 6 21 rather than the commissioner of insurance is responsible for 6 22 administering and enforcing the provisions of the chapter. 6 23 The bill reinstates language repealed in 1998 that 6 24 prescribes the power and duties of the insurance commissioner 6 25 under Code chapter 523G (changed under the bill to the 6 26 secretary of state's office), and provides for registration 6 27 requirements. The bill places the provisions in a different 6 28 place in the Code chapter and makes stylistic changes in order 6 29 to better conform with bill drafting practices. 6 30 The reinstated provision authorizes the secretary of state 6 31 to administer and enforce the provisions of the chapter, 6 32 including the following: the authority to adopt rules; 6 33 conduct investigations; administer oaths; receive evidence or 6 34 testimony including by subpoena; issue orders or apply to 6 35 district court for the issuance of orders for the production 7 1 of evidence; and issue orders to cease and desist from 7 2 engaging in acts violative of the chapter. A new provision in 7 3 the bill allows the office to apply to district court to 7 4 enforce such an order. 7 5 A new provision states that upon request, the attorney 7 6 general may assist the office in bringing a legal action 7 7 necessary in order to carry out the provisions of the chapter, 7 8 including by applying to district court in order to enforce an 7 9 order or penalties. A person who violates the chapter's 7 10 provisions is guilty of consumer fraud as provided in Code 7 11 section 714.16. 7 12 The bill reinstates provisions requiring an invention 7 13 developer to register (under the bill with the secretary of 7 14 state's office). The bill requires the same information in 7 15 the registration application, the same $250 annual 7 16 registration fee, and the same evidence of financial 7 17 responsibility as was contained in Code section 523G.10 prior 7 18 to its repeal. The bill refers to these items as registration 7 19 requirements and renumbers the provisions in a manner 7 20 consistent with Code style. 7 21 The bill provides a new section that requires that the $250 7 22 registration fee must be deposited in a special fund under the 7 23 control of the office referred to as the invention developers 7 24 administration and enforcement fund. The bill provides for 7 25 the management of the fund consistent with other funds 7 26 established in the Code. Moneys in the fund are appropriated 7 27 to the secretary of state's office and must be used 7 28 exclusively to administer and enforce the provisions of this 7 29 chapter, and may be used to reimburse expenses incurred by the 7 30 attorney general. 7 31 The bill requires the insurance commissioner and the 7 32 secretary of state to cooperate in order to efficiently 7 33 transfer authority to administer and enforce the chapter as 7 34 amended by the bill by January 1, 2001. The bill requires 7 35 the secretary of state's office to adopt rules necessary in 8 1 order to administer and enforce the chapter by January 1, 8 2 2001. The bill repeals a section in 1992 legislation 8 3 providing that certain provisions relating to evidence of 8 4 financial responsibility, registration requirements, and 8 5 enforcement authority is implemented upon an appropriation and 8 6 allocation of full-time equivalent positions. 8 7 Generally, the bill takes effect on January 1, 2001, except 8 8 for the provision concerning actions taken relating to the 8 9 transition of administration and enforcement from the 8 10 insurance division to the secretary of state. That provision 8 11 takes effect upon enactment. 8 12 LSB 5427HC 78 8 13 da/gg/8
Text: HSB00515 Text: HSB00517 Text: HSB00500 - HSB00599 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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