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House Journal: Monday, April 23, 2001

JOURNAL OF THE HOUSE

One Hundred Sixth Calendar Day - Seventy-third Session Day

Hall of the House of Representatives
Des Moines, Iowa, Monday, April 23, 2001

The House met pursuant to adjournment at 1:12 p.m., Speaker
Siegrist in the chair.

Prayer was offered by Reverend Michael Schueller, pastor of
St. Boniface Catholic Church, Garner and St. Wenceslaus Catholic
Church, Duncan. He was the guest of Representative Henry Rayhons
from Hancock County.

The Journal of Friday, April 20, 2001 was approved.

PLEDGE OF ALLEGIANCE

The Pledge of Allegiance was led by the 4-H group from Harrison
County. They are the guests of the Honorable Donna Barry, state
representative from Harrison County.

LEAVE OF ABSENCE

Leave of absence was granted as follows:

Kuhn of Floyd until his arrival, on request of Bukta of Clinton; Witt of Black Hawk,
until his arrival, on request of Myers of Johnson.

MESSAGES FROM THE SENATE

The following messages were received from the Senate:

Mr. Speaker: I am directed to inform your honorable body that the Senate has on
April 20, 2001, passed the following bill in which the concurrence of the Senate was
asked:

House File 662, a bill for an act relating to Iowa's community empowerment
initiative and providing an effective date.

Also: That the Senate has on April 20, 2001, passed the following bill in which the
concurrence of the House is asked:

Senate File 532, a bill for an act relating to matters related to the tobacco
settlement including the tobacco settlement authority, the tobacco settlement trust
fund, and the tobacco settlement endowment fund, and providing an effective date.

Also: That the Senate has on April 20, 2001, passed the following bill in which the
concurrence of the House is asked:

Senate File 533, a bill for an act relating to and making appropriations to the
tobacco settlement trust fund and providing a contingent effective date.

MICHAEL E. MARSHALL, Secretary

SENATE MESSAGES CONSIDERED

Senate File 532, by committee on appropriations, a bill for an act
relating to matters related to the tobacco settlement including the
tobacco settlement authority, the tobacco settlement trust fund, and
the tobacco settlement endowment fund, and providing an effective
date.

Read first time and referred to committee on appropriations.

Senate File 533, by committee on appropriations, a bill for an act
relating to and making appropriations to the tobacco settlement trust
fund and providing a contingent effective date.

Read first time and referred to committee on appropriations.

CONSIDERATION OF BILLS
Unfinished Business Calendar

Senate Joint Resolution 3, a joint resolution authorizing the
sixth judicial district department of correctional services to extend a
lease-purchase agreement and providing an effective date.

Kettering of Sac offered the following amendment H-1489 filed by
him and moved its adoption:

H-1489

1 Amend Senate Joint Resolution 3, as passed by the
2 Senate, as follows:
3 1. Page 1, line 8, by inserting after the word
4 "Milwaukee" the following: "for the acquisition of
5 approximately ten acres of real property located next
6 to the community-based correctional facility in Cedar
7 Rapids, Iowa. The general assembly also authorizes
8 the sixth judicial district department of correctional
9 services, in lieu of extending the current lease-

10 purchase agreement, to enter into a new lease-purchase
11 agreement for a period beginning in the year 2001 and
12 extending through June 1, 2008, for the purpose of
13 refunding the current lease-purchase agreement and
14 financing the acquisition of approximately ten acres
15 of real property located next to the community-based
16 correctional facility in Cedar Rapids, Iowa".
17 2. Page 1, line 10, by striking the words "of
18 the" and inserting the following: "or entering into
19 of a new".
20 3. Page 1, line 12, by striking the word "the"
21 and inserting the following: "or enter into a new".
22 4. Title, page 1, line 2, by striking the word
23 "a" and inserting the following: "or enter into a
24 new".
25 5. Title, page 1, line 16, by inserting after the
26 word "Iowa" the following: ", or is desirous to enter
27 into a new lease-purchase agreement to refund the
28 current lease-purchase agreement and to acquire such
29 property".
30 6. Title, page 1, by inserting after line 18 the
31 following:
32 "WHEREAS, if a new lease-purchase agreement is
33 entered into, the term would commence in the year
34 2001, and end on June 1, 2008; and".
35 7. Title, page 2, by inserting after line 1 the
36 following:
37 "WHEREAS, the sixth judicial district department of
38 correctional services requests authorization to enter
39 into a new lease-purchase agreement in lieu of
40 extending the current lease-purchase agreement if the
41 district department so desires; and".
42 8. Title, page 2, line 6, by striking the word
43 "the" and inserting the following: "or entering into
44 a new".
45 9. Title, page 2, line 7, by striking the word
46 "the" and inserting the following: "or enter into a
47 new".

Amendment H-1489 was adopted.

Kettering of Sac moved that the joint resolution be read a last time
now and placed upon its adoption which motion prevailed and the
joint resolution was read a last time.

On the question "Shall the joint resolution be adopted and agreed
to?" (S.J.R. 3)

The ayes were, 93:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Fallon
Finch	Foege	Ford	Frevert
Garman	Gipp	Greimann	Grundberg
Hahn	Hansen	Hatch	Heaton
Hoffman	Horbach	Houser	Hoversten
Huseman	Huser	Jacobs	Jenkins
Jochum	Johnson	Kettering	Klemme
Kreiman	Larkin	Larson	Lensing
Manternach	Mascher	May	Mertz
Metcalf	Millage	Murphy	O'Brien
Osterhaus	Petersen	Quirk	Raecker
Rants	Rayhons	Rekow	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Mr. Speaker
Siegrist

The nays were, none.

Absent or not voting, 7:

Falck	Kuhn	Myers	Reynolds
Schrader	Wise	Witt

The joint resolution, as amended, having received a constitutional
majority was declared to have been adopted and agreed to by the
House.

MOTION TO RECONSIDER WITHDRAWN
(Senate File 141)

Van Fossen of Scott asked and received unanimous consent to
withdraw the motion to reconsider Senate File 141, a bill for an act
relating to the allocation of program job credits to program costs
under the accelerated career education program and providing
effective and retroactive applicability dates, filed by him on April 17,
2001.

Senate File 81, a bill for an act relating to limitations on the
disbursement of economic development financial assistance moneys
by state agencies, with report of committee recommending
amendment and passage, was taken up for consideration.

Hoffman of Crawford offered the following amendment H-1438
filed by the committee on economic development and moved its
adoption:

H-1438

1 Amend Senate File 81, as passed by the Senate, as
2 follows:
3 1. Page 1, line 4, by striking the words "shall
4 give priority" and inserting the following: "may give
5 additional consideration or additional points in the
6 application of rating or evaluation criteria".

The committee amendment H-1438 was adopted.

Hoffman of Crawford moved that the bill be read a last time now
and placed upon its passage which motion prevailed and the bill was
read a last time.

On the question "Shall the bill pass?" (S.F. 81)

The ayes were, 98:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Raecker	Rants
Rayhons	Rekow	Reynolds	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Mr. Speaker
	Siegrist

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

Senate File 84, a bill for an act prohibiting the sale or
distribution of purple loosestrife, with report of committee
recommending amendment and passage, was taken up for
consideration.

Baudler of Adair offered the following amendment H-1429 filed by
the committee on natural resources and moved its adoption:

H-1429

1 Amend Senate File 84, as amended, passed, and
2 reprinted by the Senate, as follows:
3 1. Page 1, by striking lines 24 through 27, and
4 inserting the following: "~~hours.~~ Any person
5 violating the provisions of this".

The committee amendment H-1429 was adopted.

Baudler of Adair moved that the bill be read a last time now and
placed upon its passage which motion prevailed and the bill was read
a last time.

On the question "Shall the bill pass?" (S.F. 84)

The ayes were, 96:

Alons	Arnold	Atteberry	Baudler
Bell	Boal	Boddicker	Boggess
Bradley	Brauns	Broers	Brunkhorst
Bukta	Carroll	Chiodo	Cohoon
Connors	Cormack	De Boef	Dix
Dolecheck	Dotzler	Drake	Eddie
Eichhorn	Elgin	Falck	Fallon
Finch	Foege	Ford	Frevert
Garman	Gipp	Greimann	Grundberg
Hahn	Hansen	Hatch	Heaton
Hoffman	Horbach	Houser	Hoversten
Huseman	Huser	Jacobs	Jenkins
Jochum	Johnson	Kettering	Klemme
Kreiman	Kuhn	Larkin	Larson
Lensing	Manternach	Mascher	May
Mertz	Metcalf	Millage	Murphy
Myers	O'Brien	Osterhaus	Petersen
Quirk	Raecker	Rants	Rayhons
Rekow	Reynolds	Richardson	Roberts
Scherrman	Seng	Shey	Shoultz
Sievers	Smith	Stevens	Sukup
Taylor, D.	Taylor, T.	Teig	Tremmel
Tymeson	Tyrrell	Van Engelenhoven	Warnstadt
Weidman	Winckler	Wise	Mr. Speaker
			Siegrist

The nays were, none.

Absent or not voting, 4:

Barry	Schrader	Van Fossen	Witt

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Raecker	Rants
Rayhons	Rekow	Reynolds	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Mr. Speaker
	Siegrist

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

Senate File 313, a bill for an act relating to removal of county
board of supervisor appointees, with report of committee
recommending passage, was taken up for consideration.

Van Engelenhoven of Mahaska moved that the bill be read a last
time now and placed upon its passage which motion prevailed and the
bill was read a last time.

On the question "Shall the bill pass?" (S.F. 313)

The ayes were, 98:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Raecker	Rants
Rayhons	Rekow	Reynolds	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Mr. Speaker
	Siegrist

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

Senate File 323, a bill for an act relating to the standard for
investment of retirement funds by municipal utilities, with report of
committee recommending passage, was taken up for consideration.

Brauns of Muscatine moved that the bill be read a last time now
and placed upon its passage which motion prevailed and the bill was
read a last time.

On the question "Shall the bill pass?" (S.F. 323)

The ayes were, 98:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Raecker	Rants
Rayhons	Rekow	Reynolds	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Mr. Speaker
	Siegrist

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

Senate File 473, a bill for an act relating to the regulation of
securities, by defining the terms "agent" and "security", providing
registration requirements, providing for disciplinary actions,
imposing fees and civil penalties, providing for testimony and the
production of evidence, authorizing cooperation with law enforcement
entities, providing criminal penalties, and eliminating reporting
requirements, with report of committee recommending amendment
and passage, was taken up for consideration.

Hoffman of Crawford offered amendment H-1448 filed by the
committee on commerce and regulation as follows:

H-1448

1 Amend Senate File 473, as passed by the Senate, as
2 follows:
3 1. Page 7, by inserting after line 4, the
4 following:
5 "SUBCHAPTER 1
6 SHORT TITLE AND DEFINITIONS
7 Sec. . NEW SECTION. 523A.101 SHORT TITLE.
8 This chapter may be cited as the "Iowa Cemetery and
9 Funeral Merchandise and Funeral Services Act".
10 Sec. . NEW SECTION. 523A.102 DEFINITIONS.
11 For purposes of this chapter, unless the context
12 otherwise requires:
13 1. "Authorized to do business within this state"
14 means a person licensed, registered, or subject to
15 regulation by an agency of the state of Iowa or who
16 has filed a consent to service of process with the
17 commissioner for purposes of this chapter.
18 2. "Beneficiary" means any natural person
19 specified or included in a purchase agreement, upon
20 whose future death cemetery merchandise, funeral
21 merchandise, funeral services, or a combination
22 thereof are to be provided under the purchase
23 agreement.
24 3. "Burial account" means an account established
25 by a person with a financial institution for the
26 purpose of funding the future purchase of cemetery
27 merchandise, funeral merchandise, or a combination
28 thereof without any related trust agreement.
29 4. "Burial trust fund" means an irrevocable burial
30 trust fund established by a person with a financial
31 institution for the purpose of funding the future
32 purchase of cemetery merchandise, funeral merchandise,
33 funeral services, or a combination thereof upon the
34 death of the person named in the burial trust fund's
35 records or a related purchase agreement. "Burial
36 trust fund" does not include or imply the existence of
37 any oral or written purchase agreement for cemetery
38 merchandise, funeral merchandise, funeral services, or
39 a combination thereof between the person and a seller.
40 5. "Cemetery merchandise" means foundations, grave
41 markers, tombstones, ornamental merchandise,
42 memorials, and monuments sold under a purchase
43 agreement that does not require installation within
44 twelve months of the purchase.
45 6. "Commissioner" means the commissioner of
46 insurance or the deputy administrator authorized in

47 section 523A.801 to the extent the commissioner
48 delegates functions to the deputy administrator.
49 7. "Common business enterprise" means a group of
50 two or more business entities that share common

Page 2

1 ownership in excess of fifty percent.
2 8. "Credit sale" means a sale of goods, services,
3 or an interest in land in which all of the following
4 are applicable:
5 a. Credit is granted either under a seller credit
6 card or by a seller who regularly engages as a seller
7 in credit transactions of the same kind.
8 b. The buyer is a person other than an
9 organization.
10 c. The goods, services, or interest in land are
11 purchased primarily for a personal, family, or
12 household purpose.
13 d. Either the debt is payable in installments or a
14 finance charge is made.
15 e. For goods and services, the amount financed
16 does not exceed twenty-five thousand dollars.
17 9. "Delivery" occurs when:
18 a. The cemetery merchandise, funeral merchandise,
19 or the title document establishing an easement for
20 burial rights is physically delivered to the purchaser
21 or installed, except that burial of any item at the
22 site of its ultimate use shall not constitute delivery
23 for purposes of this chapter.
24 b. If authorized by a purchaser under a purchase
25 agreement, cemetery merchandise has been permanently
26 identified with the name of the purchaser or the
27 beneficiary and delivered to a bonded warehouse or
28 storage facility approved by the commissioner and both
29 title to the merchandise and a warehouse receipt have
30 been delivered to the purchaser or beneficiary and a
31 copy of the warehouse receipt has been delivered to
32 the establishment for retention in its files.
33 c. If authorized by a purchaser under a purchase
34 agreement, a polystyrene or polypropylene outer burial
35 container has been permanently identified with the
36 name of the purchaser or the beneficiary and delivered
37 to a bonded warehouse or storage facility approved by
38 the commissioner and both title to the merchandise and
39 a warehouse receipt have been delivered to the
40 purchaser or beneficiary and a copy of the warehouse
41 receipt has been delivered to the establishment for
42 retention in its files.
43 10. "Doing business in this state" means issuing
44 or performing wholly or in part any term of a purchase
45 agreement executed within the state of Iowa.

46 11. "Establishment" means each business
47 establishment that advertises, sells, promotes, or
48 offers cemetery merchandise, funeral merchandise,
49 funeral services, or a combination thereof prior to
50 the death of the person named or implied in a purchase

Page 3

1 agreement.
2 12. "Financial institution" means a state or
3 federally insured bank, savings and loan association,
4 credit union, trust department thereof, or a trust
5 company authorized to do business within this state
6 and which has been granted trust powers under the laws
7 of this state or the United States, which holds funds
8 under a trust agreement. "Financial institution" does
9 not include:
10 a. A seller.
11 b. Anyone employed by or directly involved with
12 the seller in the seller's cemetery merchandise,
13 funeral merchandise, or funeral services business.
14 13. "Funeral merchandise" means personal property
15 used for the final disposition of a dead human body,
16 including but not limited to clothing, caskets,
17 vaults, urns, and interment receptacles. "Funeral
18 merchandise" does not include easements for burial
19 rights in a completed space or cemetery merchandise.
20 14. "Funeral services" means services provided for
21 the final disposition of a dead human body, including
22 but not limited to services necessarily or customarily
23 provided for a funeral, or for the interment,
24 entombment, or cremation of a dead human body, or any
25 combination thereof. "Funeral services" does not
26 include perpetual care or maintenance.
27 15. "Inner burial container" means a container in
28 which human remains are placed for burial or
29 entombment. Where only one container is used for
30 burial or entombment, "inner burial container"
31 includes a container serving as a burial vault, urn
32 vault, grave box, grave liner, or lawn crypt.
33 16. "Insolvent" means the inability to pay debts
34 as they become due in the usual course of business.
35 17. "Interest or income" means unrealized net
36 appreciation or loss in the fair value of cemetery
37 merchandise, funeral merchandise, and funeral services
38 trust assets for which a market value may be
39 determined with reasonable certainty, plus the return
40 in money or property derived from the use of trust
41 principal or income, net of investment losses, taxes,
42 and expenses incurred in the sale of trust assets, any
43 cost of the operation of the trust, and any annual
44 audit fee. "Interest or income" includes but is not

45 limited to:
46 a. Rent of real or personal property, including
47 sums received for cancellation or renewal of a lease
48 and any royalties.
49 b. Interest on money lent, including sums received
50 as consideration for prepayment of principal.

Page 4

1 c. Cash dividends paid on corporate stock.
2 d. Interest paid on deposit funds or debt
3 obligations.
4 e. Gain realized from the sale of trust assets.
5 18. "Next of kin" means the surviving spouse and
6 heirs at law of the deceased.
7 19. "Nonguaranteed" means that the price of the
8 merchandise and services selected has not been fixed
9 or guaranteed and will be determined by existing
10 prices at the time the merchandise and services are
11 delivered or provided.
12 20. "Outer burial container" means a container
13 used for the burial of human remains that is used
14 exclusively to surround or enclose an inner burial
15 container and to support the earth above the
16 container, commonly known as a burial vault, urn
17 vault, grave box, or grave liner, but not including a
18 lawn crypt.
19 21. "Parent company" means a corporation that has
20 a controlling interest in an establishment.
21 22. "Person" means an individual, business,
22 corporation, trust, firm, partnership, association, or
23 any other legal entity.
24 23. "Personal representative" means a personal
25 representative as defined in section 633.3.
26 24. "Provider" means a person that provides
27 funeral services, funeral merchandise, or cemetery
28 merchandise purchased in a purchase agreement.
29 25. "Purchase agreement" means an agreement to
30 furnish cemetery merchandise, funeral merchandise,
31 funeral services, or a combination thereof when
32 performance or delivery may be more than one hundred
33 twenty days following the initial payment on the
34 account.
35 26. "Purchase price" means the negotiated price
36 for the item of merchandise or service, if itemized in
37 the purchase agreement, or the price of the item
38 listed in the seller's general price list at the time
39 the purchase agreement is signed.
40 27. "Purchaser" means a person who purchases
41 cemetery merchandise, funeral merchandise, funeral
42 services, or a combination thereof. The purchaser
43 need not be a beneficiary of the agreement.

44 28. "Seller" means a person doing business within
45 this state, including a person doing business within
46 this state who sells insurance, who advertises, sells,
47 promotes, or offers to furnish cemetery merchandise,
48 funeral merchandise, funeral services, or a
49 combination thereof when performance or delivery may
50 be more than one hundred twenty days following the

Page 5

1 initial payment on the account whether the transaction
2 is completed or offered in person, through the mail,
3 over the telephone, by the internet, or through any
4 other means of commerce. "Seller" includes any person
5 performing any term of a purchase agreement executed
6 within this state, and any person identified under a
7 burial account as the provider of cemetery
8 merchandise, funeral merchandise, funeral services, or
9 a combination thereof.
10 29. "Total purchase price" means the aggregate
11 amount the purchaser is obligated to pay for
12 merchandise or services pursuant to the purchase
13 agreement, excluding any taxes, administrative
14 charges, or financing charges.
15 SUBCHAPTER 2
16 ESTABLISHMENT OF TRUSTS, DEPOSIT, INVESTMENT,
17 AND REPORTING REQUIREMENTS
18 Sec. . NEW SECTION. 523A.201 ESTABLISHMENT OF
19 TRUST FUNDS.
20 Unless proceeding under section 523A.401, 523A.402,
21 or 523A.403, a seller must establish a trust fund
22 prior to advertising, selling, promoting, or offering
23 cemetery merchandise, funeral merchandise, funeral
24 services, or a combination thereof in this state as
25 follows:
26 1. The trust fund must be established at a
27 financial institution.
28 2. If a seller agrees to furnish cemetery
29 merchandise, funeral merchandise, funeral services, or
30 a combination thereof and performance or delivery may
31 be more than one hundred twenty days following the
32 initial payment on the account, a minimum of eighty
33 percent of all payments made under the purchase
34 agreement shall be placed and remain in trust until
35 the person for whose benefit the funds were paid dies.
36 3. If a purchase agreement for cemetery
37 merchandise, funeral merchandise, funeral services, or
38 a combination thereof provides that payments are to be
39 made in installments, the seller shall deposit eighty
40 percent of each payment in the trust fund until the
41 full amount required to be placed in trust has been
42 deposited. If the purchase agreement is financed with

43 or sold to a financial institution, the purchase
44 agreement shall be considered paid in full and the
45 trust requirements shall be satisfied within fifteen
46 days after the close of the month in which the seller
47 receives funds from the financial institution.
48 4. A seller shall not invade the trust principal
49 for any purpose.
50 5. A seller who lacks insurance coverage which

Page 6

1 protects against the loss of purchaser payments not
2 placed in trust within the time period required by
3 this section and section 523A.202 shall not commingle
4 these payments with any other seller funds. A seller
5 who lacks insurance coverage may use one or more of
6 the following methods to dispose of these payments:
7 a. Deposit purchaser funds into an escrow account
8 until the required amount has been deposited into a
9 trust account at a financial institution.
10 b. Make a prior delivery or warehouse cemetery or
11 funeral merchandise or a combination thereof as
12 provided by this chapter.
13 c. Make a prior filing of a surety bond in lieu of
14 establishing a trust fund as required by this section.
15 d. Make a simultaneous, same-day deposit of the
16 purchaser's payments into the seller's bank account
17 and the required amount into the seller's trust fund.
18 6. Payments otherwise subject to this section are
19 not exempt merely because they are held in
20 certificates of deposit.
21 7. Commingling of trust funds with other funds of
22 the seller is prohibited.
23 8. Interest or income earned on amounts deposited
24 in trust shall remain in trust under the same terms
25 and conditions as payments made under the purchase
26 agreement, except that the seller may withdraw so much
27 of the interest or income as represents the difference
28 between the amount needed to adjust the trust funds
29 for inflation as set by the commissioner based on the
30 consumer price index and the interest or income earned
31 during the preceding year not to exceed fifty percent
32 of the total interest or income on a calendar-year
33 basis. The early withdrawal of interest or income
34 under this provision does not affect the purchaser's
35 right to a credit of such interest or income in the
36 event of a nonguaranteed price agreement,
37 cancellation, or nonperformance by the seller.
38 9. The commissioner may require amendments to a
39 trust agreement not in accord with the provisions of
40 this chapter.
41 10. If a seller voluntarily or involuntarily

42 ceases doing business and the seller's obligation to
43 provide merchandise or services has not been assumed
44 by another establishment holding a current
45 establishment permit, all trust funds, including
46 accrued interest or income, shall be repaid to the
47 purchaser within one hundred twenty days following the
48 seller's cessation of business or, in the event of
49 circumstances where a payment is not possible within
50 one hundred twenty days, as soon as is reasonably

Page 7

1 practicable.
2 Sec. . NEW SECTION. 523A.202 TRUST FUND
3 DEPOSIT REQUIREMENTS.
4 1. All funds held in trust pursuant to section
5 523A.201 shall be deposited in a financial
6 institution, within fifteen days after the close of
7 the month a seller receives the funds. The financial
8 institution shall hold the funds for the designated
9 beneficiary until released.
10 2. All funds required to be deposited by the
11 purchaser for a purpose described in section 523A.201
12 shall be deposited consistent with one of the
13 following methods:
14 a. The payments shall be deposited directly into
15 an interest-bearing burial account in the purchaser's
16 name.
17 b. The purchaser shall deposit payments directly
18 into a separate trust account in the purchaser's name.
19 The account may be made payable to the seller upon the
20 death of the purchaser or the designated beneficiary,
21 provided that, until death, the purchaser retains the
22 exclusive power to hold, manage, pledge, and invest
23 the trust account funds and may revoke the trust and
24 withdraw the funds, in whole or in part, at any time
25 during the term of the agreement.
26 c. The purchaser or the seller shall deposit
27 payments directly into a separate trust account in the
28 name of the purchaser, as trustee, for the named
29 beneficiary, to be held, invested, and administered as
30 a trust account for the benefit and protection of the
31 beneficiary. The depositor shall notify the financial
32 institution of the existence and terms of the trust,
33 including at a minimum, the name of each party to the
34 agreement, the name and address of the trustee, and
35 the name and address of the beneficiary. The account
36 may be made payable to the seller upon the
37 beneficiary's death.
38 d. The payments shall be deposited in the name of
39 the trustee, as trustee, under the terms of a master
40 trust agreement and the trustee may invest, reinvest,

41 exchange, retain, sell, and otherwise manage the trust
42 fund for the benefit and protection of the named
43 beneficiary.
44 3. The commissioner may by rule authorize other
45 methods of deposit upon a finding that such methods
46 provide equivalent safety of the principal and
47 interest or income and the seller lacks access to the
48 proceeds prior to performance.
49 4. This section does not prohibit moving trust
50 funds from one financial institution to another.

Page 8

1 Sec. . NEW SECTION. 523A.203 FINANCIAL
2 INSTITUTION TRUSTEE QUALIFICATION AND INVESTMENT
3 REQUIREMENTS.
4 1. A financial institution may serve as a trustee
5 if granted those powers under the laws of this state
6 or of the United States. A financial institution
7 acting as a trustee of trust funds under this chapter
8 shall invest the funds in accordance with applicable
9 law.
10 2. A financial institution acting as a trustee of
11 trust funds under this chapter has a fiduciary duty to
12 make reasonable investment decisions and to properly
13 oversee and manage the funds entrusted to it. The
14 trustee shall use the judgment and care under the
15 circumstances then prevailing that persons of
16 prudence, discretion, and intelligence exercise in the
17 management of their own affairs, not in regard to
18 speculation but in regard to the permanent disposition
19 of their funds, considering the probable income as
20 well as the probable safety of their capital. The
21 commissioner may take enforcement action against a
22 financial institution in its capacity as trustee for a
23 breach of fiduciary duty proven under this chapter.
24 3. Moneys deposited under a master trust agreement
25 may be commingled by the financial institution for
26 investment purposes if each deposit includes a
27 detailed listing of the amount deposited in trust for
28 each beneficiary and maintenance of a separate
29 accounting of each purchaser's principal, interest,
30 and income.
31 4. Subject to a master trust agreement, the seller
32 may appoint an independent investment adviser to
33 advise the financial institution about investment of
34 the trust funds.
35 5. Subject to agreement between the parties, the
36 financial institution may receive a reasonable fee
37 from the trust funds for services rendered as trustee.
38 The trust shall pay the trust operation costs and any
39 annual audit fees.

40 6. The seller or any officer, director, agent,
41 employee, or affiliate of the seller shall not serve
42 as trustee. A financial institution holding trust
43 funds shall not do any of the following:
44 a. Be owned, under the control of, or affiliated
45 with a seller.
46 b. Use any funds required to be held in trust
47 under this chapter or chapter 566A to purchase an
48 interest in any contract or agreement to which a
49 seller is a party.
50 c. Otherwise invest, directly or indirectly, in a

Page 9

1 seller's business operations.
2 Sec. . NEW SECTION. 523A.204 ESTABLISHMENT
3 ANNUAL REPORTING REQUIREMENTS.
4 1. An establishment shall file with the
5 commissioner not later than March 1 of each year an
6 annual report on a form prescribed by the commissioner
7 containing all of the following:
8 a. The seller's name and address and the name and
9 address of the establishment that will provide the
10 cemetery merchandise, funeral merchandise, funeral
11 services, or a combination thereof.
12 b. The balance of each trust account as of the end
13 of the preceding calendar year, identified by
14 purchaser or beneficiary name.
15 c. A report of any amounts withdrawn from the
16 trust account including the reason for each
17 withdrawal.
18 d. A detailed listing of the insurance funding
19 outstanding at the end of the preceding calendar year,
20 identified by the name of the purchaser or the
21 beneficiary.
22 e. A complete inventory of the cemetery
23 merchandise, funeral merchandise, or a combination
24 thereof delivered in lieu of trust fund requirements
25 under section 523A.401, including the following:
26 (1) The location of the merchandise.
27 (2) Merchandise serial numbers or warehouse
28 receipt numbers identified by the name of the
29 purchaser or the beneficiary.
30 (3) A verified statement of a certified public
31 accountant on a form prescribed by the commissioner
32 that all of the following have occurred:
33 (a) A physical inventory of the cemetery
34 merchandise or funeral merchandise has been conducted.
35 (b) Each item of that merchandise is in the
36 seller's possession at the specified location.
37 f. The purchaser and beneficiary names, the amount
38 of each purchase agreement made in the preceding year,

39 and the date the purchase agreement was made.
40 g. A summary of any purchase agreements converted
41 from trust-funded benefits to insurance-funded or
42 annuity benefits during the preceding year which shall
43 include, as of the conversion date, the following
44 information, as well as aggregated totals for each of
45 the following categories of information, if
46 appropriate:
47 (1) Insured's name.
48 (2) Insured's policy number.
49 (3) Original prepaid purchase agreement amount.
50 (4) Amount paid in.

Page 10

1 (5) Unpaid balance of the prepaid purchase
2 agreement.
3 (6) Unpaid balance of the purchase agreement.
4 (7) Amount retained by the establishment.
5 (8) Amount applied to the purchase of the
6 insurance policy or annuity.
7 (9) Initial cash surrender value and initial death
8 benefit under the insurance policy.
9 The establishment shall include a notarized
10 statement attesting that the insurance policies or
11 annuities have been issued and funded on behalf of the
12 purchasers listed in the summary and that all notices
13 required under this section have been given.
14 h. A summary of any purchase agreements converted
15 from trust-funded benefits to a surety bond during the
16 preceding year which shall include, as of the
17 conversion date, the following information, as well as
18 aggregated totals for each of the following categories
19 of information, if appropriate:
20 (1) Name of the purchaser and beneficiary.
21 (2) Original prepaid purchase agreement amount.
22 (3) Amount paid in.
23 (4) Unpaid balance of the prepaid purchase
24 agreement.
25 (5) Unpaid balance of the purchase agreement.
26 (6) Amount retained by the establishment.
27 (7) Amount applied to the purchase of the surety
28 bond.
29 (8) A description of the surety bond and the
30 applicable amount of coverage.
31 i. Any other information the commissioner deems
32 necessary for the administration of this chapter.
33 2. A person holding multiple establishment permits
34 may elect to file only one annual report after noting
35 all establishments on the report.
36 3. An establishment shall make a good faith effort
37 to complete the annual report. The establishment

38 shall note on the annual report any information not
39 reasonably available to the establishment as an
40 exception or variance. Account balances within twelve
41 months of the date of the filing of the annual report
42 shall be accepted if the actual date of the account
43 balances is noted.
44 4. In lieu of the annual report form described in
45 subsection 1, the commissioner may authorize an
46 establishment to file a short form annual report on a
47 form prescribed by the commissioner. The short form
48 annual report may incorporate by reference information
49 readily available to the establishment. The
50 commissioner may certify and decertify establishments

Page 11

1 authorized to file the short form based upon:
2 a. The establishment's recordkeeping system.
3 b. The number of purchase agreements which the
4 establishment has sold that are subject to regulation
5 under chapter 523A.
6 c. The availability and accessibility of
7 information at the establishment for purchase
8 agreements subject to regulation.
9 d. Whether the establishment places one hundred
10 percent of funds received pursuant to its purchase
11 agreements in trust.
12 e. The findings of the commissioner concerning
13 audits and consumer complaints.
14 The commissioner shall retain the authority to
15 require establishments permitted to file the short
16 form annual report to provide all of the information
17 required in the annual report form required by
18 subsection 1 for audit purposes or otherwise.
19 5. An establishment filing an annual report shall
20 pay a filing fee of ten dollars per purchase agreement
21 sold during the year covered by the report. The fee
22 does not apply to any of the following:
23 a. A purchase agreement where the beneficiary dies
24 in the same year the agreement was sold.
25 b. Any modifications or additions, such as
26 payments, for an existing purchase agreement sold in a
27 previous year.
28 c. An additional agreement purchased and already
29 reported to the commissioner by the purchaser.
30 d. A purchase agreement canceled or revoked in the
31 same year it was sold.
32 All purchase agreement changes for which a filing
33 fee is not required must be reported to the
34 commissioner on the annual report for the year
35 covered.
36 6. As part of the annual filing with the

37 commissioner, an establishment shall file an
38 authorization for the commissioner or a designee to
39 investigate, audit, and verify all funds, accounts,
40 safe deposit boxes, and other evidence of
41 establishment trust funds held by or in a financial
42 institution.
43 7. Forms may be obtained at cost from the
44 commissioner upon request. The commissioner may
45 accept annual reports submitted in an electronic
46 format, including but not limited to computer
47 diskettes.
48 8. Notwithstanding chapter 22, all records
49 maintained by the commissioner under this section
50 shall be confidential and shall not be made available

Page 12

1 for inspection or copying except upon approval of the
2 commissioner or the attorney general.
3 Sec. . NEW SECTION. 523A.205 FINANCIAL
4 INSTITUTION ANNUAL REPORTING REQUIREMENTS.
5 1. A financial institution shall file with the
6 commissioner not later than March 1 of each year an
7 annual report on a form prescribed by the commissioner
8 showing all funds deposited by an establishment under
9 a trust agreement during the previous year. Each
10 report shall contain all information requested.
11 2. Forms may be obtained from the commissioner
12 upon request. The commissioner may accept annual
13 reports submitted in an electronic format, including
14 but not limited to computer diskettes.
15 3. Notwithstanding chapter 22, all records
16 maintained by the commissioner under this section
17 shall be confidential and shall not be made available
18 for inspection or copying except upon approval of the
19 commissioner or the attorney general.
20 Sec. . NEW SECTION. 523A.206 AUDITS.
21 1. The commissioner may make audits of the
22 establishment and of the records of a seller, at the
23 times and in the scope the commissioner determines.
24 The audits may be made without prior notice to the
25 seller. The commissioner may copy all records the
26 commissioner feels are necessary to conduct the audit.
27 The commissioner may require an audit of a seller or
28 other person by a certified public accountant to
29 verify compliance with this chapter, implementing
30 rules, or orders.
31 2. A seller or other person shall pay for the
32 audit unless the commissioner waives this requirement.
33 The cost of an audit involving multiple sellers or
34 other persons shall be prorated among them upon any
35 reasonable basis as determined by the commissioner.

36 The accountant shall deliver the audit report to the
37 commissioner and to the seller or other persons.
38 3. The commissioner shall not make public the
39 information obtained in the course of an audit, except
40 when a duty under this chapter requires the
41 commissioner to take action against a seller or to
42 cooperate with another enforcement or regulatory
43 agency, or except when the commissioner is called as a
44 witness in a civil or criminal proceeding.
45 SUBCHAPTER 3
46 DISBURSEMENT OF REMAINING BURIAL ACCOUNT FUNDS,
47 BURIAL TRUST FUNDS, AND INSURANCE OR ANNUITY PROCEEDS
48 UNDER THE REQUIREMENTS OF SECTION 249A.5
49 Sec. . NEW SECTION. 523A.301 DEFINITION.
50 As used in sections 523A.302 and 523A.303,

Page 13

1 "director" means the director of human services.
2 Sec. . NEW SECTION. 523A.302 IDENTIFICATION
3 OF MERCHANDISE AND SERVICE PROVIDER.
4 If a burial trust fund identifies, either in the
5 trust fund records or in a related purchase agreement,
6 the seller who will provide the cemetery merchandise,
7 funeral merchandise, funeral services or a combination
8 thereof, the trust fund records or the related
9 purchase agreements must contain a statement signed by
10 an authorized representative of the seller agreeing to
11 furnish the cemetery merchandise, funeral merchandise,
12 funeral services, or a combination thereof upon the
13 death of the beneficiary. The burial trust fund shall
14 not identify a specific seller as payee unless the
15 trust fund records or the related purchase agreements,
16 if any, contain the signature of an authorized
17 representative of the seller and, if the agreement is
18 for funeral services as defined in chapter 156, the
19 name of a funeral director licensed to deliver those
20 services. A person may enter into agreements
21 authorizing the establishment of more than one burial
22 trust fund and agreeing to furnish the applicable
23 merchandise and services.
24 Sec. . NEW SECTION. 523A.303 DISBURSEMENT OF
25 REMAINING FUNDS.
26 1. If funds remain in a nonguaranteed irrevocable
27 burial trust fund or from the proceeds of an insurance
28 policy or annuity made payable or assigned to the
29 seller or a provider after the payment of funeral and
30 burial expenses in accordance with the conditions and
31 terms of the purchase agreement for cemetery
32 merchandise, funeral merchandise, or funeral services,
33 the seller shall comply with all of the following:
34 a. The seller shall provide written notice by mail

35 to the director under subsection 2.
36 b. At least sixty days after mailing notice to the
37 director, the seller shall disburse any remaining
38 funds from the burial trust fund as follows:
39 (1) If within the sixty-day period the seller
40 receives a claim from the personal representative of
41 the deceased, any remaining funds shall be disbursed
42 to the personal representative, notwithstanding any
43 claim by the director.
44 (2) If within the sixty-day period the seller has
45 not received a claim from the personal representative
46 of the deceased but receives a claim from the
47 director, the seller shall disburse the remaining
48 funds up to the amount of the claim to the director.
49 (3) Any remaining funds not disposed of pursuant
50 to subparagraphs (1) and (2) shall be disbursed to any

Page 14

1 person who is identified as the next of kin of the
2 deceased in an affidavit submitted in accordance with
3 subsection 5.
4 2. The notice mailed to the director shall meet
5 all of the following requirements and is subject to
6 all of the following conditions:
7 a. The notice shall be mailed with postage
8 prepaid.
9 b. If the notice is sent by regular mail, the
10 sixty-day period for receipt of a response is deemed
11 to commence three days following the date of mailing.
12 c. If the notice is sent by certified mail, the
13 sixty-day period for receipt of a response is deemed
14 to commence on the date of mailing.
15 d. The notice shall provide all of the following
16 information:
17 (1) Current name, address, and telephone number of
18 the seller.
19 (2) Full name of the deceased.
20 (3) Date of the deceased's death.
21 (4) Amount of funds remaining in the burial trust
22 fund.
23 (5) Statement that any claim by the director must
24 be received by the seller within sixty days after the
25 date of mailing of the notice.
26 e. A notice in substantially the following form
27 complies with this subsection:
28 "TO: THE DIRECTOR OF HUMAN SERVICES
29 FROM: (SELLER'S NAME, CURRENT ADDRESS, AND
30 TELEPHONE NUMBER)
31 YOU ARE HEREBY NOTIFIED THAT (NAME OF DECEASED),
32 WHO HAD AN IRREVOCABLE BURIAL TRUST FUND, HAS DIED,
33 THAT FINAL PAYMENT FOR CEMETERY MERCHANDISE, FUNERAL

34 MERCHANDISE, AND FUNERAL SERVICES HAS BEEN MADE, AND
35 THAT (REMAINING AMOUNT) REMAINS IN THE IRREVOCABLE
36 BURIAL TRUST FUND.
37 THE ABOVE-NAMED SELLER MUST RECEIVE A WRITTEN
38 RESPONSE REGARDING ANY CLAIM BY THE DIRECTOR WITHIN
39 SIXTY DAYS AFTER THE MAILING OF THIS NOTICE TO THE
40 DIRECTOR.
41 IF THE ABOVE-NAMED SELLER DOES NOT RECEIVE A
42 WRITTEN RESPONSE REGARDING A CLAIM BY THE DIRECTOR
43 WITHIN SIXTY DAYS AFTER THE MAILING OF THIS NOTICE,
44 THE SELLER MAY DISPOSE OF THE REMAINING FUNDS IN
45 ACCORDANCE WITH SECTION 523A.303, CODE OF IOWA."
46 3. Upon receipt of the seller's written notice,
47 the director shall determine if a debt is due the
48 department of human services pursuant to section
49 249A.5. If the director determines that a debt is
50 owing, the director shall provide a written response

Page 15

1 to the seller within sixty days after the mailing of
2 the seller's notice. If the director does not respond
3 with a claim within the sixty-day period, any claim
4 made by the director shall not be enforceable against
5 the seller, the trust, or a trustee.
6 4. A personal representative who wishes to make a
7 claim shall send written notice of the claim to the
8 seller. If the seller does not receive any claim from
9 a personal representative within the sixty-day period
10 provided for response by the director regarding a
11 claim, the claim of the personal representative shall
12 not be enforceable against the seller, the trust, or a
13 trustee.
14 5. Any person other than a personal representative
15 or the director claiming an interest in the remaining
16 funds shall submit an affidavit claiming an interest
17 which provides the following information:
18 a. Full name, current address, and telephone
19 number of the claimant.
20 b. Claimant's relationship to the deceased.
21 c. Name of any surviving next of kin of the
22 deceased, and the relationship of any named surviving
23 next of kin.
24 d. That the claimant has no knowledge of the
25 existence of a personal representative for the
26 deceased's estate.
27 6. The seller may retain not more than fifty
28 dollars of the remaining funds in the burial trust
29 fund for the administrative expenses associated with
30 the requirements of this section.
31 7. If the funds remaining in a burial trust fund
32 are disbursed under the requirements of this section,

33 the seller, the provider, the burial trust fund, and
34 any trustee shall not be liable to the director, the
35 estate of the deceased, any personal representative,
36 or any other interested person for the remaining funds
37 and any lien imposed by the director shall be
38 unenforceable against the seller, the burial trust
39 fund, or any trustee.
40 SUBCHAPTER 4
41 TRUSTING ALTERNATIVES
42 Sec. . NEW SECTION. 523A.401 PURCHASE
43 AGREEMENTS FUNDED BY INSURANCE PROCEEDS.
44 1. A purchase agreement may be funded by insurance
45 proceeds derived from a new or existing insurance
46 policy issued by an insurance company authorized to do
47 business and doing business within this state.
48 2. Such funding may be in lieu of the trusting
49 requirements of this chapter when the purchaser
50 assigns the proceeds of an existing insurance policy.

Page 16

1 3. Such funding may be in lieu of the trusting
2 requirements of this chapter when a new insurance
3 policy is purchased to fund the purchase agreement,
4 with a face amount equal to or greater than the
5 current retail price of the cemetery merchandise,
6 funeral merchandise, and funeral services to be
7 delivered under the purchase agreement or, if less, a
8 face amount equal to the total of all payments to be
9 submitted by the purchaser pursuant to the purchase
10 agreement.
11 4. The premiums of any new insurance policy shall
12 be fully paid within thirty days after execution of
13 the purchase agreement or, with respect to a purchase
14 agreement that provides for periodic payments, the
15 premiums shall be paid directly by the purchaser to
16 the insurance company issuing the policy.
17 5. Any new insurance policy shall satisfy the
18 following conditions:
19 a. Except as necessary and appropriate to satisfy
20 the requirements regarding burial trust funds under
21 Title XIX of the federal Social Security Act, the
22 policy shall not be owned by the establishment, the
23 policy shall not be irrevocably assigned to the
24 establishment, and the assignment of proceeds from the
25 insurance policy to the establishment shall be limited
26 to the establishment's interests as they appear in the
27 purchase agreement, and conditioned on the
28 establishment's delivery of cemetery merchandise,
29 funeral merchandise, and funeral services pursuant to
30 a purchase agreement.
31 b. The policy shall provide that any assignment of

32 benefits is contingent upon the establishment's
33 delivery of cemetery merchandise, funeral merchandise,
34 and funeral services pursuant to a purchase agreement.
35 c. The policy shall have an increasing death
36 benefit or similar feature that provides some means
37 for increasing the funding as the cost of funeral and
38 cemetery goods and services increases.
39 6. With the written consent of the purchaser, an
40 existing prepaid purchase agreement with trust-funded
41 benefits may be converted to a prepaid purchase
42 agreement with insurance-funded benefits provided the
43 establishment and the insurance benefits comply with
44 the following provisions:
45 a. The transfer of the trust funds to the
46 insurance company must be at least equal to the full
47 sum required to be deposited as trust principal under
48 the trust-funded prepaid purchase agreement plus all
49 net earnings accumulated with respect thereto, as of
50 the transfer date. Commissions, allowances, surrender

Page 17

1 charges or other forms of compensation or expense
2 loads, premium expense, administrative charges or
3 expenses, or policy fees shall not be deducted from
4 the trust funds transferred pursuant to the
5 conversion.
6 b. The face amount of any insurance policy issued
7 on an individual must be no less than the amount of
8 principal and interest transferred for that individual
9 to the insurance company, and any supplemental
10 insurance policy issued to cover the unfunded portion
11 of the purchase agreement must have a face amount that
12 is at least as great as the unfunded principal
13 balance. The face amount of the insurance purchased
14 shall not, under any circumstances, be less than the
15 total of all payments made by the purchaser pursuant
16 to the agreement plus all net earnings accumulated
17 with respect thereto, as of the transfer date.
18 c. The insurance policy shall not allow for
19 contesting coverage, limit death benefits in the case
20 of suicide, refer to physical examination, or
21 otherwise operate as an exclusion, limitation, or
22 condition other than requiring submission of proof of
23 death or surrender of policy at the time the prepaid
24 purchase agreement is funded, matures, or is canceled,
25 as the case may be.
26 d. The establishment shall maintain a copy of any
27 prepaid trust-funded purchase agreement that was
28 converted to a prepaid insurance-funded purchase
29 agreement and retain the payment history records for
30 each converted purchase agreement prior to conversion

31 until the cemetery merchandise, funeral merchandise,
32 and funeral services have been delivered.
33 7. The seller of a purchase agreement subject to
34 this chapter which is to be funded by insurance
35 proceeds shall obtain all permits required to be
36 obtained and comply with all reporting requirements
37 under this chapter.
38 8. An insurance company issuing policies funding
39 purchase agreements subject to this chapter shall file
40 an annual report with the commissioner on a form
41 prescribed by the commissioner. The report shall list
42 the applicable insurance policies outstanding for each
43 establishment. Computer printouts may be submitted so
44 long as each legibly provides the same information
45 required in the prescribed form.
46 Sec. . NEW SECTION. 523A.402 PURCHASE
47 AGREEMENTS FUNDED BY ANNUITY PROCEEDS.
48 1. A purchase agreement may be funded by proceeds
49 derived from a new or existing annuity issued by an
50 insurance company authorized to do business and doing

Page 18

1 business within this state.
2 2. Such funding may be in lieu of the trust
3 requirements of this chapter when the purchaser
4 assigns the proceeds of an existing annuity.
5 3. Such funding may be in lieu of the trust
6 requirements of this chapter when a new annuity is
7 purchased to fund the purchase agreement, with a face
8 amount equal to or greater than the current retail
9 price of the cemetery merchandise, funeral
10 merchandise, and funeral services to be delivered
11 under the purchase agreement or, if less, a face
12 amount equal to the total of all payments to be
13 submitted by the purchaser pursuant to the purchase
14 agreement.
15 4. The premiums of any new annuity shall be fully
16 paid within thirty days after execution of the
17 purchase agreement or, with respect to a purchase
18 agreement that provides for periodic payments, the
19 premiums shall be paid directly by the purchaser to
20 the insurance company issuing the annuity.
21 5. The annuity shall satisfy the following
22 conditions:
23 a. Except as necessary and appropriate to satisfy
24 the requirements regarding burial trust funds under
25 Title XIX of the federal Social Security Act, the
26 annuity shall not be owned by the establishment or
27 irrevocably assigned and any designation of the
28 establishment as a beneficiary shall not be made
29 irrevocable.

30 b. The annuity shall provide that any assignment
31 of benefits is contingent upon the establishment's
32 delivery of cemetery merchandise, funeral merchandise,
33 and funeral services pursuant to a purchase agreement.
34 c. The annuity shall have an increasing death
35 benefit or similar feature that provides some means
36 for increasing the funding as the cost of cemetery
37 merchandise, funeral merchandise, and funeral services
38 increases.
39 6. With the written consent of the purchaser, an
40 existing prepaid purchase agreement with trust-funded
41 benefits may be converted to a prepaid purchase
42 agreement with annuity-funded benefits provided the
43 establishment and the annuity benefits comply with the
44 following provisions:
45 a. The transfer of the trust funds to the
46 insurance company must be at least equal to the full
47 sum required to be deposited as trust principal under
48 the trust-funded prepaid purchase agreement plus all
49 net earnings accumulated with respect thereto, as of
50 the transfer date. Commissions, allowances, surrender

Page 19

1 charges or other forms of compensation or expense
2 loads, premium expense, administrative charges or
3 expenses, or fees shall not be deducted from the trust
4 funds transferred pursuant to the conversion.
5 b. The face amount of any annuity issued on an
6 individual must be no less than the amount of
7 principal and interest transferred for that individual
8 to the insurance company, and any supplemental annuity
9 issued to cover the unfunded portion of the purchase
10 agreement must have a face amount that is at least as
11 great as the unfunded principal balance. The face
12 amount of the annuity purchased shall not, under any
13 circumstances, be less than the total of all payments
14 made by the purchaser pursuant to the agreement plus
15 all net earnings accumulated with respect thereto, as
16 of the transfer date.
17 c. The annuity shall not allow for contesting
18 coverage, limit death benefits in the case of suicide,
19 refer to physical examination, or otherwise operate as
20 an exclusion, limitation, or condition other than
21 requiring submission of proof of death or surrender of
22 the annuity at the time the prepaid purchase agreement
23 is funded, matures, or is canceled, as the case may
24 be.
25 d. The establishment shall maintain a copy of any
26 prepaid trust-funded purchase agreement that was
27 converted to a prepaid annuity-funded purchase
28 agreement and retain the payment history records for

29 each converted purchase agreement prior to conversion
30 until the cemetery merchandise, funeral merchandise,
31 and funeral services have been delivered.
32 7. The seller of a purchase agreement subject to
33 this chapter which is to be funded by annuity proceeds
34 shall obtain all permits required to be obtained and
35 comply with all reporting requirements under this
36 chapter.
37 8. An insurance company issuing annuities funding
38 purchase agreements subject to this chapter shall file
39 an annual report with the commissioner on a form
40 prescribed by the commissioner. The report shall list
41 the applicable annuities outstanding for each
42 establishment. Computer printouts may be submitted so
43 long as each legibly provides the same information
44 required in the prescribed form.
45 Sec. . NEW SECTION. 523A.403 PURCHASE
46 AGREEMENTS FUNDED BY CERTIFICATES OF DEPOSIT.
47 1. A purchase agreement may be funded by proceeds
48 derived from a certificate of deposit in the name of
49 the purchaser made payable to the seller upon the
50 purchaser's death.

Page 20

1 2. The seller of a purchase agreement subject to
2 this chapter which is to be funded by a certificate of
3 deposit shall obtain all permits required to be
4 obtained and comply with all reporting requirements
5 under this chapter, implementing rules, and orders.
6 Sec. . NEW SECTION. 523A.404 MERCHANDISE
7 DELIVERED TO THE PURCHASER OR WAREHOUSED.
8 1. Trust requirements do not apply to payments for
9 outer burial containers made of either polystyrene or
10 polypropylene or cemetery merchandise delivered to the
11 purchaser or stored in an independent third-party
12 storage facility not owned or controlled by the seller
13 when approved by the commissioner. The seller or the
14 storage facility must demonstrate that they will do
15 all of the following:
16 a. Issue a receipt of ownership in the name of the
17 purchaser and deliver it to the purchaser.
18 b. Insure the merchandise against loss.
19 c. Protect the merchandise against damage.
20 d. Transfer title to the purchaser.
21 e. Appropriately identify and describe the
22 merchandise in a manner that it can be distinguished
23 from other similar items.
24 f. Use a method of storage that allows for visual
25 audits of the merchandise.
26 g. Have adequate, computerized, recordkeeping
27 systems in place to identify, describe, and count each

28 item in storage, including the ownership of each item,
29 and provide an aggregate listing with numerical
30 totals.
31 h. File a consent to be audited and inspected by
32 the commissioner.
33 i. Provide reports to the commissioner, annually,
34 by an independent certified public accountant, which
35 shall include a physical count of merchandise held in
36 storage and a review of information, including the
37 seller's revenue and sales records, as necessary to
38 verify the adequacy of the number of items held at the
39 storage facility.
40 j. Satisfy the annual reporting requirements of
41 section 523A.204.
42 2. Lawn crypts may be delivered in lieu of
43 trusting. For this purpose, delivery means
44 installation in a grave owned by the purchaser. The
45 seller shall do all of the following:
46 a. Notify the administrator before the lawn crypts
47 are installed.
48 b. Identify the intended location of the lawn
49 crypts within the cemetery.
50 c. Provide documentation adequately demonstrating

Page 21

1 delivery has occurred. Adequate documentation
2 includes but is not limited to photographs and third-
3 party certifications.
4 3. Cemetery merchandise and funeral merchandise
5 shall not be deemed delivered to the purchaser or
6 warehoused if the merchandise is subject to a lien or
7 security interest by any party other than the seller.
8 4. An establishment is prohibited from requiring
9 delivery as a condition of the sale.
10 5. A seller shall provide services necessary for
11 the installation or burial of outer burial containers
12 sold by the seller. This subsection shall not require
13 the seller to provide for the opening or closing of
14 the interment or entombment space, unless the purchase
15 agreement provides otherwise.
16 Sec. . NEW SECTION. 523A.405 BOND IN LIEU OF
17 TRUST FUND.
18 1. In lieu of trust requirements, a seller may
19 file with the commissioner a surety bond issued by a
20 surety company authorized to do business and doing
21 business within this state. The bond must be
22 conditioned upon the seller's faithful performance of
23 purchase agreements subject to this chapter. The
24 surety's liability extends to each such agreement
25 executed while the bond is in force and until
26 performance or recision of the purchase agreement. To

27 the extent expressly agreed to in writing by the
28 surety, the surety's liability extends to each such
29 agreement subject to this chapter executed prior to
30 the time the bond was in force and until performance
31 or recision of the agreement. A purchaser aggrieved
32 by a breach of a condition of the bond covering the
33 purchaser's agreement may maintain an action against
34 the bond. If, at the time of the breach, the
35 purchaser is aware of the purchaser's rights under the
36 bond and how to file a claim against the bond, the
37 surety shall not be liable for any breach of condition
38 unless the surety receives notice of a claim within
39 sixty days following discovery of the acts, omissions,
40 or conditions constituting the breach of condition,
41 except as otherwise provided in this section. A
42 surety bond shall not be canceled by a surety except
43 upon a written notice of cancellation given by the
44 surety to the commissioner by restricted certified
45 mail, and not prior to the expiration of sixty days
46 after receipt of the notice by the commissioner. The
47 surety's liability shall extend to each purchase
48 agreement subject to this chapter executed prior to
49 cancellation of the surety bond until the seller has
50 complied with section 3.

Page 22

1 2. If a seller becomes insolvent or otherwise
2 ceases to engage in business prior to or within sixty
3 days after cancellation of a bond, the seller shall be
4 deemed to have breached the bond conditions for
5 outstanding agreements under this chapter as of the
6 day prior to cancellation of the bond. The
7 commissioner shall mail written notice by restricted
8 certified mail to the purchaser under each outstanding
9 purchase agreement of the seller that a claim against
10 the bond must be filed with the surety company within
11 sixty days after the mailing date of the notice. The
12 surety shall cease to be liable for all purchase
13 agreements except those for which claims are filed
14 with the surety company within sixty days after the
15 date the commissioner mails the notices.
16 3. If a surety bond is canceled by a surety under
17 any conditions other than those specified in
18 subsection 2, the seller shall comply with all of the
19 following:
20 a. The seller shall comply with the trust
21 requirements of section 523A.201 for all purchase
22 agreements subject to this chapter executed on or
23 after the effective date of cancellation of the surety
24 bond. In the alternative, the seller may submit a
25 substitute surety bond meeting the requirements of

26 subsection 1, but the seller must comply with section
27 523A.201 for any purchase agreements executed on or
28 after the effective cancellation date of the earlier
29 surety bond and prior to the effective date of the
30 later surety bond.
31 b. Within sixty days after the effective
32 cancellation date of the surety bond, the seller shall
33 submit to the commissioner an undertaking by another
34 surety company that a substitute surety bond meeting
35 the requirements of subsection 1 is in effect and that
36 the liability of the substitute surety bond extends to
37 all outstanding purchase agreements of the seller that
38 were executed but not performed or extinguished prior
39 to the effective date of the substitute surety bond,
40 or the seller shall submit to the commissioner a
41 financial statement accompanied by an unqualified
42 opinion based upon an audit performed by a certified
43 public accountant licensed in this state certifying
44 the total amount of outstanding liabilities of the
45 seller on purchase agreements subject to this chapter
46 and proof of deposit by the seller in trust under
47 section 523A.201 of either the amount specified in
48 section 523A.201, including interest as set by the
49 commissioner based on the interest which would have
50 been earned had the funds been maintained in trust,

Page 23

1 with respect to all of those outstanding purchase
2 agreements or, where applicable, that delivery of
3 merchandise has been made in compliance with section
4 523A.404. The surety may require such security as is
5 necessary to comply with this section. Upon
6 compliance by the seller with this paragraph, the
7 surety company canceling the surety bond shall cease
8 to be liable with respect to any outstanding purchase
9 agreements of the seller except those purchase
10 agreements with respect to which a breach of condition
11 occurred prior to cancellation and for which timely
12 claims were filed.
13 4. Section 523A.202, and, to the extent it is
14 applicable, section 523A.206, apply to sellers whose
15 purchase agreements are covered by a surety bond
16 maintained under this section, and section 523A.202
17 continues to apply to any purchase agreements of those
18 sellers that are not covered by a surety bond
19 maintained under this section.
20 5. Upon receiving a notice of cancellation of a
21 surety bond, the commissioner shall notify the seller
22 of the requirements of this chapter resulting from
23 cancellation of the bond. The notice may be in the
24 form of a copy of this section and sections 523A.201

25 and 523A.202.
26 6. Upon receiving a notice of cancellation, unless
27 the seller has complied with the requirements of this
28 section, the attorney general shall seek an injunction
29 to prohibit the seller from making further purchase
30 agreements subject to this chapter. The attorney
31 general shall commence an action to attach and levy
32 execution upon property of the seller when the seller
33 fails to perform a purchase agreement subject to this
34 chapter, to the extent necessary to secure compliance
35 with this chapter. The county attorney may bring
36 criminal charges under subchapter 7.
37 7. The surety under this section shall not be
38 owned, under the control of, or affiliated with the
39 seller.
40 8. The amount of the surety bond shall equal
41 eighty percent of the payments received pursuant to
42 purchase agreements, or the applicable portion
43 thereof, for cemetery merchandise, funeral
44 merchandise, funeral services, or a combination
45 thereof and the amount needed to adjust the amount of
46 the surety bond for inflation as set by the
47 commissioner based on the consumer price index. The
48 seller shall review the amount of the surety bond no
49 less than annually and shall increase the bond as
50 necessary to reflect additional payments. The amount

Page 24

1 needed to adjust for inflation shall be added annually
2 to the surety bond during the first quarter of the
3 establishment's fiscal year.
4 9. With the consent of the purchaser, an existing
5 prepaid purchase agreement with trust-funded benefits
6 may be converted to a prepaid purchase agreement
7 funded by a surety bond provided the establishment and
8 the surety bond comply with the following provisions:
9 a. The amount of the trust funds transferred to
10 the surety company must be at least equal to the full
11 sum required to be deposited as trust principal under
12 the trust-funded prepaid purchase agreement plus all
13 net earnings accumulated with respect thereto, as of
14 the transfer date. Commissions, allowances, surrender
15 charges or other forms of compensation or expense
16 loads, premium expense, administrative charges or
17 expenses, or fees shall not be deducted from the trust
18 funds transferred pursuant to the conversion.
19 b. The face amount of the surety bond issued on an
20 individual must be no less than the amount of
21 principal and interest transferred for that individual
22 to the surety company, and any supplemental surety
23 bond issued to cover the unfunded portion of the

24 purchase agreement must have a face amount that is at
25 least as great as the unfunded principal balance. The
26 face amount of the surety bond purchased shall not,
27 under the circumstances, be less than the total of all
28 payments made by the purchaser pursuant to the
29 agreement plus all net earnings accumulated with
30 respect thereto, as of the transfer date.
31 c. The establishment shall maintain a copy of any
32 prepaid trust-funded agreement that was converted to a
33 prepaid purchase agreement funded by a surety bond and
34 retain the payment history records for each converted
35 purchase agreement prior to conversion until the
36 cemetery merchandise, funeral merchandise, and funeral
37 services have been delivered.
38 SUBCHAPTER 5
39 PERMIT REQUIREMENTS FOR SELLERS OF CEMETERY
40 MERCHANDISE, FUNERAL MERCHANDISE, FUNERAL SERVICES,
41 OR A COMBINATION THEREOF
42 Sec. . NEW SECTION. 523A.501 ESTABLISHMENT
43 PERMITS.
44 1. A person shall not advertise, sell, promote, or
45 offer to furnish cemetery merchandise, funeral
46 merchandise, funeral services, or a combination
47 thereof when performance or delivery may be more than
48 one hundred twenty days following the initial payment
49 on the account without an establishment permit. Each
50 establishment must have an establishment permit.

Page 25

1 2. An application for an establishment permit
2 shall be filed on a form prescribed by the
3 commissioner, be accompanied by a fifty dollar filing
4 fee, and include a copy of each purchase agreement the
5 person will use for sales of cemetery merchandise,
6 funeral merchandise, funeral services, or a
7 combination thereof.
8 3. The application shall contain:
9 a. The name and address of the establishment.
10 b. The name and address of any additional provider
11 of cemetery merchandise, funeral merchandise, funeral
12 services, or a combination thereof.
13 c. The name and address of each owner, officer, or
14 other official of the establishment, including when
15 relevant the chief executive officer and the members
16 of the board of directors.
17 d. A description of any common business enterprise
18 or parent company.
19 e. The types of cemetery merchandise, funeral
20 merchandise, funeral services, or a combination
21 thereof to be sold.
22 f. The types of trust or trust alternatives

23 utilized by the establishment and a list of the
24 financial institutions, storage facilities, surety
25 companies, and insurance companies utilized by the
26 establishment on a regular basis.
27 4. A permit holder shall inform the commissioner
28 of changes in the information required to be provided
29 by subsection 3 within thirty days of the change.
30 5. An establishment permit is not assignable or
31 transferable. A permit holder selling all or part of
32 an establishment shall cancel the permit and the
33 purchaser shall apply for a new permit in the
34 purchaser's name within thirty days of the sale.
35 6. The commissioner shall grant or deny a permit
36 application within thirty days after receipt, but the
37 commissioner's failure to act within that time period
38 shall not be deemed approval of the application. If
39 the commissioner does not grant the permit, the
40 commissioner shall notify the person in writing of the
41 reasons for the denial. The permit shall disclose on
42 its face the permit holder's employer or the
43 establishment on whose behalf the applicant will be
44 making or attempting to make sales, the permit number,
45 and the expiration date.
46 7. An initial permit is valid for two years from
47 the date the application is filed. A permit may be
48 renewed for two years by filing the form prescribed by
49 the commissioner under subsection 2, accompanied by a
50 ten dollar renewal fee. Submission of purchase

Page 26

1 agreements is not required for renewals unless the
2 purchase agreements have been modified since the last
3 filing.
4 8. The commissioner may by rule create or accept a
5 multijurisdiction establishment permit. If the
6 establishment permit is issued by another
7 jurisdiction, the rules shall require the filing of an
8 application or notice form and payment of the
9 applicable filing fee of fifty dollars for an initial
10 application and ten dollars for a renewal application.
11 The application or notice form utilized and the
12 effective dates and terms of the permit may vary from
13 the provisions set forth in subsections 2, 3, and 7.
14 Sec. . NEW SECTION. 523A.502 SALES PERMITS.
15 1. A person shall not advertise, sell, promote, or
16 offer to furnish cemetery merchandise, funeral
17 merchandise, funeral services, or a combination
18 thereof when performance or delivery may be more than
19 one hundred twenty days following initial payment on
20 the account without a sales permit. A permit holder
21 must be an employee or agent of a person holding an

22 establishment permit who can deliver the cemetery
23 merchandise, funeral merchandise, funeral services, or
24 a combination thereof being sold. A person must have
25 a sales permit for each establishment at which the
26 person works. However, a person may apply for a sales
27 permit covering multiple establishments, if the
28 establishments have common ownership. The
29 establishment permit holder is liable for the acts of
30 its employees and agents performed in advertising,
31 selling, promoting, or offering to furnish, upon the
32 future death of a person named or implied in a
33 purchase agreement, cemetery merchandise, funeral
34 merchandise, funeral services, or a combination
35 thereof.
36 2. This chapter does not permit a person to
37 practice mortuary science without a license. A person
38 holding a current sales permit may advertise, sell,
39 promote, or offer to furnish a funeral director's
40 services as an employee or agent of a funeral
41 establishment furnishing the funeral services under
42 chapter 156.
43 3. An application for a sales permit shall be
44 filed on a form prescribed by the commissioner and be
45 accompanied by a five dollar filing fee.
46 4. The application shall contain:
47 a. The name and address of the person.
48 b. The name and address of the person's employer
49 and each establishment on whose behalf the person will
50 be advertising, selling, promoting, or offering to

Page 27

1 furnish cemetery merchandise, funeral merchandise,
2 funeral services, or a combination thereof.
3 c. The name and address of the provider who will
4 provide the cemetery merchandise, funeral merchandise,
5 funeral services, or a combination thereof if
6 different from the person's employer.
7 5. An initial permit expires one year from the
8 date the application is filed. The permit may be
9 renewed for four years by filing the form prescribed
10 by the commissioner under subsection 3, accompanied by
11 a twenty dollar filing fee.
12 6. A permit holder shall inform the commissioner
13 of changes in the information required to be provided
14 by subsection 4 within thirty days of the change.
15 7. A sales permit is not assignable or
16 transferable. A permit holder selling all or part of
17 a business shall cancel the permit and the purchaser
18 shall apply for a new permit in the purchaser's name
19 within thirty days of the sale.
20 8. The commissioner shall grant or deny a permit

21 application within thirty days after receipt, but the
22 commissioner's failure to act within that time period
23 shall not be deemed approval of the application. If
24 the commissioner does not grant the permit, the
25 commissioner shall notify the applicant in writing of
26 the reasons for the denial.
27 9. The commissioner may by rule create or accept a
28 multijurisdiction sales permit. If the sales permit
29 is issued by another jurisdiction, the rules shall
30 require the filing of an application or notice form
31 and payment of the applicable filing fee of five
32 dollars for each year. The application or notice form
33 utilized and the effective dates and terms of the
34 permit may vary from the provisions set forth in
35 subsections 3 and 5.
36 Sec. . NEW SECTION. 523A.503 DENIAL,
37 SUSPENSION, REVOCATION, AND SURRENDER OF PERMITS.
38 1. The commissioner may, pursuant to chapter 17A,
39 deny any permit application or immediately suspend or
40 revoke any permit issued under this chapter for
41 several reasons, including but not limited to:
42 a. Committing a fraudulent act, engaging in a
43 fraudulent practice, or violating any provision of
44 this chapter or, any implementing rule or order issued
45 under this chapter.
46 b. Violating any other state or federal law
47 applicable to the conduct of the applicant's or permit
48 holder's business.
49 c. Insolvency or financial condition.
50 d. The permit holder, for the purpose of avoiding

Page 28

1 the trust requirement for funeral services, attributes
2 amounts paid under the purchase agreement to cemetery
3 merchandise or funeral merchandise that is delivered
4 under section 523A.404 rather than to funeral services
5 sold to the purchaser. The sale of funeral services
6 at a lower price when the sale is made in conjunction
7 with the sale of cemetery merchandise or funeral
8 merchandise to be delivered under section 523A.404
9 than the services are regularly and customarily sold
10 for when not sold in conjunction with cemetery
11 merchandise or funeral merchandise is evidence that
12 the permit holder is acting with the purpose of
13 avoiding the trust requirement for funeral services
14 under section 523A.201.
15 e. Engaging in a deceptive act or practice or
16 deliberately misrepresenting or omitting a material
17 fact regarding the sale of cemetery merchandise,
18 funeral merchandise, funeral services, or a
19 combination thereof under this chapter.

20 f. Conviction of a criminal offense involving
21 dishonesty or a false statement.
22 g. Inability to provide the cemetery merchandise,
23 funeral merchandise, funeral services, or a
24 combination thereof which the applicant or permit
25 holder purports to sell.
26 h. The applicant or permit holder sells the
27 business without filing a prior notice of sale with
28 the commissioner. The permit shall be revoked thirty
29 days following such sale.
30 i. Selling by a person who is not an employee or
31 agent of the applicant or permit holder.
32 2. The commissioner may, for good cause shown,
33 suspend any permit for a period not exceeding thirty
34 days, pending investigation.
35 3. Except as provided in subsection 2, a permit
36 shall not be revoked or suspended except after notice
37 and hearing under chapter 17A.
38 4. Any permit holder may surrender a permit by
39 delivering to the commissioner written notice that the
40 permit holder surrenders the permit, but the surrender
41 shall not affect the permit holder's civil or criminal
42 liability for acts committed before the surrender.
43 5. Denial, revocation, suspension, or surrender of
44 a permit does not impair or affect the obligation of
45 any preexisting lawful agreement between the permit
46 holder and any person.
47 SUBCHAPTER 6
48 PURCHASE AGREEMENT REQUIREMENTS
49 Sec. . NEW SECTION. 523A.601 DISCLOSURES.
50 1. A purchase agreement for cemetery merchandise,

Page 29

1 funeral merchandise, funeral services, or a
2 combination thereof shall be written in clear,
3 understandable language, and shall be printed or typed
4 in an easy-to-read font, size, and style, and shall:
5 a. Identify the seller, the salesperson's permit
6 and establishment name and permit number, the
7 expiration date of the salesperson's permit, the
8 purchaser, and the person for whom the cemetery
9 merchandise, funeral merchandise, funeral services, or
10 a combination thereof is purchased, if other than the
11 purchaser.
12 b. Specify the cemetery merchandise, funeral
13 merchandise, funeral services, or a combination
14 thereof, to be provided, and the cost of each
15 merchandise item or service.
16 c. State clearly the conditions upon which
17 substitution will be allowed.
18 d. State the total purchase price and the terms

19 under which it is to be paid.
20 e. State clearly whether the purchase agreement is
21 a guaranteed price agreement or a nonguaranteed price
22 agreement. A nonguaranteed price agreement shall
23 contain in twelve point bold-faced type an explanation
24 of the consequences of such agreement in substantially
25 the following language:
26 THE PRICES OF MERCHANDISE AND SERVICES UNDER THIS
27 AGREEMENT ARE SUBJECT TO CHANGE IN THE FUTURE. ANY
28 FUNDS PAID UNDER THIS AGREEMENT ARE ONLY A DEPOSIT TO
29 BE APPLIED, TOGETHER WITH ACCRUED INCOME, TOWARD THE
30 FINAL COSTS OF THE MERCHANDISE OR SERVICES AGREED
31 UPON. ADDITIONAL CHARGES MAY BE INCURRED WHEN
32 ADDITIONAL MERCHANDISE OR SERVICES OR BOTH ARE
33 PROVIDED OR WHEN PRICES HAVE INCREASED MORE THAN
34 ACCRUED INCOME.
35 f. State that the purchase of the cemetery
36 merchandise, funeral merchandise, and funeral services
37 is revocable and specify the damages for cancellation,
38 if any.
39 g. State clearly who has the authority to cancel,
40 amend, or revoke the purchase agreement to purchase
41 cemetery merchandise, funeral merchandise, and funeral
42 services.
43 h. State clearly that the purchaser is entitled to
44 rescind the purchase agreement under terms and
45 conditions specified by section 523A.602.
46 i. Include an explanation of regulatory oversight
47 by the insurance division in twelve point bold-faced
48 type, in substantially the following language:
49 THIS AGREEMENT IS SUBJECT TO RULES ADMINISTERED BY
50 THE IOWA INSURANCE DIVISION. YOU MAY CALL THE

Page 30

1 INSURANCE DIVISION AT (___) ________. WRITTEN
2 INQUIRIES OR COMPLAINTS SHOULD BE MAILED TO THE IOWA
3 SECURITIES BUREAU, (STREET ADDRESS), (CITY), IOWA (ZIP
4 CODE).
5 2. A purchase agreement that is funded by a trust
6 shall also:
7 a. State the percentage of money to be placed in
8 trust.
9 b. Explain the disposition of the income generated
10 from investments and include a statement of the
11 purchaser's responsibility for income taxes owed on
12 the income if applicable.
13 c. State that if, after all payments are made
14 under the conditions and terms of the purchase
15 agreement for cemetery merchandise, funeral
16 merchandise, funeral services, or a combination
17 thereof, any funds remain in the nonguaranteed

18 irrevocable burial trust fund, the seller shall
19 disburse the remaining funds according to law.
20 d. State clearly the terms of the funeral and
21 burial trust agreement and whether it is revocable or
22 irrevocable.
23 e. State clearly that the purchaser is entitled to
24 transfer the trust funding, insurance funding, or
25 other trust assets or select another establishment to
26 receive the trust funding, insurance funding, or any
27 other trust assets.
28 f. State clearly who has the authority to amend or
29 revoke the trust agreement, if revocable, and who has
30 the authority to appoint successor trustees if the
31 purchase agreement is canceled.
32 3. The commissioner may adopt rules establishing
33 disclosure and format requirements to promote consumer
34 understanding of the merchandise and services
35 purchased and the available funding mechanisms for a
36 purchase agreement under this chapter.
37 4. A purchase agreement shall be signed by the
38 purchaser, the seller, and if the agreement is for
39 funeral services as defined in chapter 156, a person
40 licensed to deliver funeral services.
41 5. The seller shall disclose the following
42 information prior to accepting the initial payment
43 under a purchase agreement:
44 a. The specific method or methods (trust deposits,
45 certificates of deposit, life insurance or an annuity,
46 a surety bond, or warehousing) that will be used to
47 fund the purchase agreement.
48 b. The relationship between the soliciting agent
49 or agents, the provider of the cemetery merchandise,
50 funeral merchandise, or funeral services, or

Page 31

1 combination thereof, the commissioner, and any other
2 person.
3 c. The relationship of the life insurance policy
4 or other trust assets to the funding of the purchase
5 agreement and the nature and existence of any
6 guarantees regarding the purchase agreement.
7 d. The impact on the purchase agreement of the
8 following:
9 (1) Changes in the funding, including but not
10 limited to changes in the assignment, beneficiary
11 designation, trustee, or use of proceeds.
12 (2) Any penalties to be incurred by the purchaser
13 as a result of the failure to make any additional
14 payments required.
15 (3) Penalties to be incurred upon cancellation.
16 e. A list of cemetery merchandise, funeral

17 merchandise, and funeral services which are agreed
18 upon under the purchase agreement and all relevant
19 information concerning the price of the cemetery
20 merchandise, funeral merchandise, funeral services, or
21 a combination thereof, including a statement that the
22 purchase price is either guaranteed at the time of
23 purchase or to be determined at the time of need.
24 f. All relevant information concerning what occurs
25 and whether any entitlements or obligations arise if
26 there is a difference between the funding and the
27 amount actually needed to fund the purchase agreement.
28 g. Any penalties or restrictions including but not
29 limited to geographic restrictions or the inability of
30 the provider to perform, upon delivery of cemetery
31 merchandise, funeral merchandise, or funeral services,
32 or the purchase agreement guarantee.
33 h. If the funding is being transferred from
34 another establishment, any material facts related to
35 the revocation of the prior purchase agreement and the
36 transfer of the existing trust funds.
37 Sec. . NEW SECTION. 523A.602 CONSUMER
38 RECISION, CANCELLATION, AND REFUND RIGHTS, AND
39 PURCHASE AGREEMENT COMPLIANCE WITH OTHER LAWS.
40 1. A seller shall furnish the purchaser with a
41 completed copy of a purchase agreement pertaining to
42 the sale at the time the purchase agreement is signed.
43 The seller shall comply with the following terms:
44 a. The same language shall be used in both the
45 oral sales representation and the written purchase
46 agreement.
47 b. The seller shall give notice in the purchase
48 agreement of the purchaser's right to rescind after
49 signing the purchase agreement. The recision period
50 must be but may be greater than three business days

Page 32

1 after the date of the purchase agreement. The notice
2 must:
3 (1) Be located close to the signature line.
4 (2) Be printed in twelve point bold-faced type.
5 (3) State that "YOU, THE PURCHASER, HAVE THE RIGHT
6 TO RESCIND THIS AGREEMENT AT ANY TIME PRIOR TO
7 MIDNIGHT OF THE (INSERT RELEVANT NUMBER, NOT LESS THAN
8 THREE) BUSINESS DAYS AFTER THE DATE OF THIS
9 AGREEMENT."
10 c. All moneys shall be refunded without penalty
11 within ten days after recision.
12 2. CANCELLATION REFUND.
13 a. A purchase agreement must include a statement
14 that the purchaser has the right to cancel the
15 agreement for the purchase of cemetery merchandise,

16 funeral merchandise, and funeral services upon written
17 demand and designate or appoint a trustee to hold,
18 manage, invest, and distribute the trust assets.
19 b. If a purchase agreement is canceled, a
20 purchaser requests a transfer of the trust assets upon
21 cancellation of a purchase agreement, or another
22 establishment provides merchandise or services
23 designated in a purchase agreement, the seller shall
24 refund or transfer within thirty days of receiving a
25 written demand no less than the purchase price of the
26 applicable cemetery merchandise, funeral merchandise,
27 and funeral services adjusted for inflation, using the
28 consumer price index amounts announced by the
29 commissioner annually, less any cancellation penalty
30 set forth in the purchase agreement. The amount of
31 the cancellation penalty shall not exceed ten percent
32 of the purchase price of the applicable cemetery
33 merchandise, funeral merchandise, and funeral
34 services. The seller may also deduct the value of the
35 cemetery merchandise, funeral merchandise, and funeral
36 services already received by, delivered to, or
37 warehoused for the purchaser.
38 c. A purchase agreement must include a statement
39 that the purchaser is entitled to a refund of the
40 purchase price of the applicable funeral merchandise
41 adjusted for inflation, using the consumer price index
42 amounts announced by the commissioner annually for any
43 item of funeral merchandise that cannot be delivered
44 to the location specified in the purchase agreement
45 within forty-eight hours of notice of the individual's
46 death, unless the delay is caused by weather
47 conditions or a natural disaster. The seller must
48 return such refund to the purchaser within thirty days
49 of receiving the written demand.
50 3. This section does not prohibit a purchaser who

Page 33

1 is or may become eligible for benefits under Title XIX
2 of the federal Social Security Act from making a
3 guaranteed price purchase agreement irrevocable to the
4 extent that federal law or regulations require that
5 such an agreement be irrevocable for purposes of a
6 purchaser's eligibility for benefits under Title XIX
7 of the federal Social Security Act, as permitted under
8 federal law. The seller of credit sale agreements
9 shall comply with the requirements of chapter 537, the
10 Iowa consumer credit code, and is subject to the
11 remedies and penalties provided in that chapter for
12 noncompliance.
13 SUBCHAPTER 7
14 FRAUDULENT PRACTICES

15 Sec. . NEW SECTION. 523A.701 MISLEADING
16 FILINGS.
17 It is unlawful for a person to make or cause to be
18 made, in any document filed with the commissioner, or
19 in any proceeding under this chapter, any statement of
20 material fact which is, at the time and in the light
21 of the circumstances under which it is made, false or
22 misleading, or, in connection with such statement, to
23 omit to state a material fact necessary in order to
24 make the statements made, in the light of the
25 circumstances under which they are made, not
26 misleading.
27 Sec. . NEW SECTION. 523A.702
28 MISREPRESENTATIONS OF GOVERNMENT APPROVAL.
29 It is unlawful for a seller under this chapter to
30 represent or imply in any manner that the seller has
31 been sponsored, recommended, or approved, or that the
32 seller's abilities or qualifications have in any
33 respect been passed upon by the commissioner.
34 Sec. . NEW SECTION. 523A.703 FRAUDULENT
35 PRACTICES.
36 A person who commits any of the following acts
37 commits a fraudulent practice and is punishable as
38 provided in chapter 714:
39 1. Knowingly fails to comply with any requirement
40 of this chapter.
41 2. Knowingly makes, causes to be made, or
42 subscribes to a false statement or representation in a
43 report or other document required under this chapter,
44 implementing rules, or orders, or renders such a
45 report or document misleading through the deliberate
46 omission of information properly belonging in the
47 report or document.
48 3. Conspires to defraud in connection with the
49 sale of cemetery merchandise, funeral merchandise,
50 funeral services, or a combination thereof under this

Page 34

1 chapter.
2 4. Fails to deposit funds under sections 523A.201
3 and 523A.202 or withdraws any funds in a manner
4 inconsistent with this chapter.
5 5. Knowingly sells or offers cemetery merchandise,
6 funeral merchandise, funeral services, or a
7 combination thereof without an establishment permit.
8 6. Deliberately misrepresents or omits a material
9 fact relative to the sale of cemetery merchandise,
10 funeral merchandise, funeral services, or a
11 combination thereof under this chapter. When selling
12 cemetery merchandise or funeral merchandise, a seller
13 shall not exclude the funeral services necessary for

14 the delivery, use, or installation of the cemetery
15 merchandise or funeral merchandise at the time of the
16 funeral or burial unless the purchase agreement
17 expressly provides otherwise.
18 SUBCHAPTER 8
19 ADMINISTRATION AND ENFORCEMENT
20 Sec. . NEW SECTION. 523A.801 ADMINISTRATION.
21 1. This chapter shall be administered by the
22 commissioner. The deputy administrator appointed
23 pursuant to section 502.601 shall be the principal
24 operations officer responsible to the commissioner for
25 the routine administration of this chapter and
26 management of the administrative staff. In the
27 absence of the commissioner, whether because of
28 vacancy in the office due to absence, physical
29 disability, or other cause, the deputy administrator
30 shall, for the time being, have and exercise the
31 authority conferred upon the commissioner. The
32 commissioner may by order from time to time delegate
33 to the deputy administrator any or all of the
34 functions assigned to the commissioner in this
35 chapter. The deputy administrator shall employ
36 officers, attorneys, accountants, and other employees
37 as needed for administering this chapter.
38 2. It is unlawful for the commissioner or any
39 administrative staff to use for personal benefit any
40 information which is filed with or obtained by the
41 commissioner and which is not made public. This
42 chapter does not authorize the commissioner or any
43 such staff member to disclose any such information
44 except among themselves or to other cemetery and
45 funeral administrators, regulatory authorities, or
46 governmental agencies, or when necessary and
47 appropriate in a proceeding or investigation under
48 this chapter or as required by chapter 22. This
49 chapter neither creates nor derogates any privileges
50 that exist at common law or otherwise when documentary

Page 35

1 or other evidence is sought under a subpoena directed
2 to the commissioner or any administrative staff.
3 Sec. . NEW SECTION. 523A.802 SCOPE.
4 1. This chapter applies to any advertisement,
5 sale, promotion, or offer made by a person to furnish,
6 upon the future death of a person named or implied in
7 a purchase agreement, cemetery merchandise, funeral
8 merchandise, funeral services, or a combination
9 thereof. Burial accounts and insurance policies are
10 included if the account records or related documents
11 identify the establishment that will provide the
12 cemetery merchandise, funeral merchandise, funeral

13 services, or a combination thereof.
14 2. This chapter applies when a purchase agreement
15 is executed within this state or an advertisement,
16 promotion, or offer to furnish is made or accepted
17 within this state. An offer to furnish is made within
18 this state, whether or not either party is then
19 present in this state, when the offer originates from
20 this state or is directed by the offeror to this state
21 and received by the offeree in this state through the
22 mail, over the telephone, by the internet, or through
23 any other means of commerce.
24 3. If a foreign person does not have a registered
25 agent or agents in the state of Iowa, doing business
26 within this state shall constitute the person's
27 appointment of the secretary of state of the state of
28 Iowa to be its true and lawful attorney upon whom may
29 be served all lawful process of original notice in
30 actions or proceedings arising or growing out of any
31 contract or tort.
32 Sec. . NEW SECTION. 523A.803 INVESTIGATIONS
33 AND SUBPOENAS.
34 1. The commissioner may, for the purpose of
35 discovering violations of this chapter, implementing
36 rules, or orders issued under this chapter:
37 a. Make such public or private investigations
38 within or outside of this state as the commissioner
39 deems necessary to determine whether any person has
40 violated or is about to violate this chapter,
41 implementing rules, or orders issued under this
42 chapter, or to aid in enforcement of this chapter or
43 in the prescribing of rules and forms under this
44 chapter.
45 b. Require or permit any person to file a
46 statement in writing, under oath or otherwise as the
47 commissioner or attorney general determines, as to all
48 the facts and circumstances concerning the matter to
49 be investigated.
50 c. Notwithstanding chapter 22, keep confidential

Page 36

1 the information obtained in the course of an
2 investigation. However, if the commissioner
3 determines that it is necessary or appropriate in the
4 public interest or for the protection of the public,
5 the commissioner may share information with other
6 administrators, regulatory authorities, or
7 governmental agencies, or may publish information
8 concerning a violation of this chapter, implementing
9 rules, or orders issued under this chapter.
10 d. Investigate the establishment and examine the
11 books, accounts, papers, correspondence, memoranda,

12 purchase agreements, files, or other documents or
13 records used by every applicant and permit holder
14 under this chapter.
15 e. Administer oaths and affirmations, subpoena
16 witnesses, compel their attendance, take evidence, and
17 require the production of any books, accounts, papers,
18 correspondence, memoranda, purchase agreements, files,
19 or other documents or records which the commissioner
20 deems relevant or material to any investigation or
21 proceeding under this chapter and implementing rules,
22 all of which may be enforced under chapter 17A.
23 f. Apply to the district court for an order
24 requiring a person's appearance before the
25 commissioner or attorney general, or a designee of
26 either or both, in cases where the person has refused
27 to obey a subpoena issued by the commissioner or
28 attorney general. The person may also be required to
29 produce documentary evidence germane to the subject of
30 the investigation. Failure to obey a court order
31 under this subsection constitutes contempt of court.
32 2. The commissioner may issue and bring an action
33 in district court to enforce subpoenas within this
34 state at the request of an agency or administrator of
35 another state, if the activity constituting an alleged
36 violation for which the information is sought would be
37 a violation of this chapter had the activity occurred
38 in this state.
39 Sec. . NEW SECTION. 523A.804 MEDIATION.
40 The commissioner may order an establishment to
41 participate in mediation in any dispute regarding a
42 purchase agreement. Mediation performed under this
43 section shall be conducted by a mediator appointed by
44 the commissioner and shall comply with the provisions
45 of chapter 679C.
46 Mediation of these disputes shall include
47 attendance at a mediation session with the mediator
48 and the parties to the dispute, listening to the
49 mediator's explanation of the mediation process,
50 presentation of one party's view of the dispute, and

Page 37

1 listening to the response of the other party.
2 Participation in mediation does not require that the
3 parties reach a mediation agreement.
4 Parties to the mediation shall have the right to
5 advice and presence of counsel at all times. The
6 parties to the mediation shall present any mediation
7 agreement reached through the mediation to the
8 commissioner. If a mediation agreement is not
9 reached, the mediator shall file a report with the
10 commissioner. The costs of the mediation shall be

11 approved by the commissioner and shall be borne by the
12 insurance division's regulatory fund.
13 Sec. . NEW SECTION. 523A.805 CEASE AND DESIST
14 ORDERS - INJUNCTIONS.
15 If it appears to the commissioner that a person has
16 engaged or is about to engage in an act or practice
17 constituting a violation of this chapter, implementing
18 rules, or orders issued under this chapter, the
19 commissioner or the attorney general may do either or
20 both of the following:
21 1. Issue a summary order directed at the person
22 requiring the person to cease and desist from engaging
23 in such act or practice. A person may request a
24 hearing within thirty days of issuance of the summary
25 order. If a hearing is not timely requested, the
26 summary order shall become final by operation of law.
27 The order shall remain effective from the date of
28 issuance until the date the order becomes final by
29 operation of law or is overturned by a presiding
30 officer following a request for hearing. Section
31 17A.18A is inapplicable to summary cease and desist
32 orders issued under this section.
33 2. Bring an action in the district court in any
34 county of the state for an injunction to restrain a
35 person subject to this chapter and any agents,
36 employees, or associates of the person from engaging
37 in conduct or practices deemed contrary to the public
38 interest. In any proceeding for an injunction, the
39 commissioner or attorney general may apply to the
40 court for a subpoena to require the appearance of a
41 defendant and the defendant's agents and for any
42 books, accounts, papers, correspondence, memoranda,
43 purchase agreements, files, or other documents or
44 records germane to the hearing upon the petition for
45 an injunction. Upon a proper showing, a permanent or
46 temporary injunction, restraining order, or writ of
47 mandamus shall be granted and a receiver may be
48 appointed for the defendant or the defendant's assets.
49 The commissioner or attorney general shall not be
50 required to post a bond.

Page 38

1 Sec. . NEW SECTION. 523A.806 COURT ACTION FOR
2 FAILURE TO COOPERATE.
3 If a person fails or refuses to file any statement
4 or report or to produce any books, accounts, papers,
5 correspondence, memoranda, purchase agreements, files,
6 or other documents or records, or to obey any subpoena
7 issued by the commissioner, the commissioner may refer
8 the matter to the attorney general, who may apply to a
9 district court to enforce compliance. The court may

10 order any or all of the following:
11 1. Injunctive relief, restricting or prohibiting
12 the offer or sale of cemetery merchandise, funeral
13 merchandise, funeral services, or a combination
14 thereof.
15 2. Revocation or suspension of any permit issued
16 under this chapter.
17 3. Production of documents or records including
18 but not limited to books, accounts, papers,
19 correspondence, memoranda, purchase agreements, files,
20 or other documents or records.
21 4. Such other relief as may be required.
22 Such an order shall be effective until the person
23 files the statement or report or produces the
24 documents requested, or obeys the subpoena.
25 Sec. . NEW SECTION. 523A.807 PROSECUTION FOR
26 VIOLATIONS OF LAW.
27 1. A violation of this chapter or rules adopted or
28 orders issued under this chapter is a violation of
29 section 714.16, subsection 2, paragraph "a". The
30 remedies and penalties provided by section 714.16,
31 including but not limited to injunctive relief and
32 penalties, apply to violations of this chapter.
33 2. If the commissioner believes that grounds exist
34 for the criminal prosecution of persons subject to
35 this chapter for violations of this chapter or any
36 other law of this state, the commissioner may forward
37 to the attorney general or the county attorney the
38 grounds for the belief, including all evidence in the
39 commissioner's possession, so that the attorney
40 general or the county attorney may proceed with the
41 matter as deemed appropriate. At the request of the
42 attorney general, the county attorney shall appear and
43 prosecute the action when brought in the county
44 attorney's county.
45 Sec. . NEW SECTION. 523A.808 COOPERATION WITH
46 OTHER AGENCIES.
47 1. To encourage uniform interpretation and
48 administration of this chapter and effective
49 regulation of the sale of cemetery merchandise,
50 funeral merchandise, and funeral services, the

Page 39

1 commissioner may cooperate with any governmental law
2 enforcement or regulatory agency.
3 2. This cooperation includes but is not limited
4 to:
5 a. Making a joint examination or investigation.
6 b. Holding a joint administrative hearing.
7 c. Filing and prosecuting a joint civil or
8 administrative proceeding.

9 d. Sharing and exchanging personnel.
10 e. Sharing and exchanging relevant information and
11 documents.
12 f. Formulating, in accordance with chapter 17A,
13 rules or proposed rules on matters such as statements
14 of policy, regulatory standards, guidelines, and
15 interpretive opinions.
16 Sec. . NEW SECTION. 523A.809 RULES, FORMS,
17 AND ORDERS.
18 1. Under chapter 17A, the commissioner may from
19 time to time make, amend, and rescind such rules,
20 forms, and orders as are necessary or appropriate for
21 the protection of purchasers and the public and to
22 administer the provisions of this chapter, its
23 implementing rules, and orders issued under this
24 chapter.
25 2. A rule, form, or order shall not be made,
26 amended, or rescinded unless the commissioner finds
27 that the action is necessary or appropriate in the
28 public interest or for the protection of purchasers
29 and consistent with the purposes fairly intended by
30 the policies and provisions of this chapter, its
31 implementing rules, and orders issued under this
32 chapter.
33 3. A provision of this chapter imposing any
34 liability does not apply to any act done or omitted in
35 good faith in conformity with any rules, form, or
36 order of the commissioner, notwithstanding that the
37 rule, form, or order may later be amended or rescinded
38 or be determined by judicial or other authority to be
39 invalid for any reason.
40 Sec. . NEW SECTION. 523A.810 DATE OF FILING
41 AND INTERPRETIVE OPINIONS.
42 1. A document is filed when it is received by the
43 commissioner.
44 2. Requests for interpretive opinions may be
45 granted in the commissioner's discretion.
46 Sec. . NEW SECTION. 523A.811 RECEIVERSHIPS.
47 1. The commissioner shall notify the attorney
48 general of the potential need for establishment of a
49 receivership if the commissioner finds that a seller
50 subject to this chapter meets one or more of the

Page 40

1 following conditions:
2 a. Is insolvent.
3 b. Has utilized trust funds for personal or
4 business purposes in a manner inconsistent with this
5 chapter.
6 c. The amount of funds currently held in trust for
7 cemetery merchandise, funeral merchandise, and funeral

8 services is less than eighty percent of all payments
9 made under the purchase agreements referred to in
10 section 523A.201.
11 d. Has refused to pay any just claim or demand
12 based on a purchase agreement referred to in section
13 523A.201.
14 e. The commissioner finds upon investigation that
15 a seller is unable to pay any claim or demand based on
16 a purchase agreement which has been legally determined
17 to be just and outstanding.
18 2. The commissioner or attorney general may apply
19 to the district court in any county of the state for
20 the establishment of a receivership. Upon proof of
21 any of the grounds for a receivership described in
22 this section, the court may grant a receivership.
23 Sec. . NEW SECTION. 523A.812 INSURANCE
24 DIVISION'S REGULATORY FUND.
25 The insurance division may authorize the creation
26 of a special revenue fund in the state treasury, to be
27 known as the insurance division regulatory fund. The
28 commissioner shall allocate annually from the fees
29 paid pursuant to section 523A.204, two dollars for
30 each purchase agreement reported on an establishment
31 permit holder's annual report for deposit to the
32 regulatory fund. The remainder of the fees collected
33 pursuant to section 523A.204 shall be deposited into
34 the general fund of the state. The moneys in the
35 regulatory fund shall be retained in the fund. The
36 moneys are appropriated and, subject to authorization
37 by the commissioner, may be used to pay auditors,
38 audit expenses, investigative expenses, the expenses
39 of mediation ordered by the commissioner, consumer
40 education expenses, the expenses of a toll-free
41 telephone line to receive consumer complaints, and the
42 expenses of receiverships established under section
43 523A.811. An annual allocation to the regulatory fund
44 shall not be imposed if the current balance of the
45 fund exceeds two hundred thousand dollars.
46 Sec. . NEW SECTION. 523A.813 LICENSE
47 REVOCATION - RECOMMENDATION BY COMMISSIONER TO BOARD
48 OF MORTUARY SCIENCE EXAMINERS.
49 Upon a determination by the commissioner that
50 grounds exist for an administrative license revocation

Page 41

1 or suspension action by the board of mortuary science
2 examiners under chapter 156, the commissioner may
3 forward to the board the grounds for the
4 determination, including all evidence in the
5 possession of the commissioner, so that the board may
6 proceed with the matter as deemed appropriate.

7 SUBCHAPTER 9
8 LIQUIDATION PROCEDURES
9 Sec. . NEW SECTION. 523A.901 LIQUIDATION.
10 1. GROUNDS FOR LIQUIDATION. The commissioner may
11 petition the district court for an order directing the
12 commissioner to liquidate an establishment on either
13 of the following grounds:
14 a. The establishment did not deposit funds
15 pursuant to section 523A.201 or withdrew funds in a
16 manner inconsistent with this chapter and is
17 insolvent.
18 b. The establishment did not deposit funds
19 pursuant to section 523A.201 or withdrew funds in a
20 manner inconsistent with this chapter and the
21 condition of the establishment is such that further
22 transaction of business would be hazardous,
23 financially or otherwise, to purchasers or the public.
24 2. LIQUIDATION ORDER.
25 a. An order to liquidate the business of an
26 establishment shall appoint the commissioner as
27 liquidator and shall direct the liquidator to
28 immediately take possession of the assets of the
29 establishment and to administer them under the general
30 supervision of the court. The liquidator is vested
31 with the title to the property, contracts, and rights
32 of action and the books and records of the
33 establishment ordered liquidated, wherever located, as
34 of the entry of the final order of liquidation. The
35 filing or recording of the order with the clerk of
36 court and the recorder of deeds of the county in which
37 its principal office or place of business is located,
38 or, in the case of real estate with the recorder of
39 deeds of the county where the property is located, is
40 notice as a deed, bill of sale, or other evidence of
41 title duly filed or recorded with the recorder of
42 deeds.
43 b. Upon issuance of an order, the rights and
44 liabilities of an establishment and of the
45 establishment's creditors, purchasers, owners, and
46 other persons interested in the establishment's estate
47 shall become fixed as of the date of the entry of the
48 order of liquidation, except as provided in subsection
49 14.
50 c. At the time of petitioning for an order of

Page 42

1 liquidation, or at any time after the time of
2 petitioning, the commissioner, after making
3 appropriate findings of an establishment's insolvency,
4 may petition the court for a declaration of
5 insolvency. After providing notice and hearing as it

6 deems proper, the court may make the declaration.
7 d. An order issued under this section shall
8 require accounting to the court by the liquidator.
9 Accountings, at a minimum, must include all funds
10 received or disbursed by the liquidator during the
11 current period. An accounting shall be filed within
12 one year of the liquidation order and at such other
13 times as the court may require.
14 e. Within five days after the initiation of an
15 appeal of an order of liquidation, which order has not
16 been stayed, the commissioner shall present for the
17 court's approval a plan for the continued performance
18 of the establishment's obligations during the pendency
19 of an appeal. The plan shall provide for the
20 continued performance of purchase agreements in the
21 normal course of events, notwithstanding the grounds
22 alleged in support of the order of liquidation
23 including the ground of insolvency. If the defendant
24 establishment's financial condition, in the judgment
25 of the commissioner, will not support the full
26 performance of all obligations during the appeal
27 pendency period, the plan may prefer the claims of
28 certain purchasers and claimants over creditors and
29 interested parties as well as other purchasers and
30 claimants, as the commissioner finds to be fair and
31 equitable considering the relative circumstances of
32 such purchasers and claimants. The court shall
33 examine the plan submitted by the commissioner and if
34 it finds the plan to be in the best interests of the
35 parties, the court shall approve the plan. An action
36 shall not lie against the commissioner or any of the
37 commissioner's deputies, agents, clerks, assistants,
38 or attorneys by any party based on preference in an
39 appeal pendency plan approved by the court.
40 3. POWERS OF LIQUIDATOR.
41 a. The liquidator may do any of the following:
42 (1) Appoint a special deputy to act for the
43 liquidator under this chapter, and determine the
44 special deputy's reasonable compensation. The special
45 deputy shall have all the powers of the liquidator
46 granted by this section. The special deputy shall
47 serve at the pleasure of the liquidator.
48 (2) Hire employees and agents, legal counsel,
49 accountants, appraisers, consultants, and other
50 personnel as the commissioner may deem necessary to

Page 43

1 assist in the liquidation.
2 (3) With the approval of the court, fix reasonable
3 compensation of employees and agents, legal counsel,
4 accountants, appraisers, and consultants.

5 (4) Pay reasonable compensation to persons
6 appointed and defray from the funds or assets of the
7 establishment all expenses of taking possession of,
8 conserving, conducting, liquidating, disposing of, or
9 otherwise dealing with the business and property of
10 the establishment. If the property of the
11 establishment does not contain sufficient cash or
12 liquid assets to defray the costs incurred, the
13 commissioner may advance the costs so incurred out of
14 the insurance division regulatory fund. Amounts so
15 advanced for expenses of administration shall be
16 repaid to the insurance division regulatory fund for
17 the use of the division out of the first available
18 moneys of the establishment.
19 (5) Hold hearings, subpoena witnesses, and compel
20 their attendance, administer oaths, examine a person
21 under oath, and compel a person to subscribe to the
22 person's testimony after it has been correctly reduced
23 to writing, and in connection to the proceedings
24 require the production of books, accounts, papers,
25 correspondence, memoranda, purchase agreements, files,
26 or other documents or records which the liquidator
27 deems relevant to the inquiry.
28 (6) Collect debts and moneys due and claims
29 belonging to the establishment, wherever located.
30 Pursuant to this subparagraph, the liquidator may do
31 any of the following:
32 (a) Institute timely action in other jurisdictions
33 to forestall garnishment and attachment proceedings
34 against debts.
35 (b) Perform acts as are necessary or expedient to
36 collect, conserve, or protect its assets or property,
37 including the power to sell, compound, compromise, or
38 assign debts for purposes of collection upon terms and
39 conditions as the liquidator deems best.
40 (c) Pursue any creditor's remedies available to
41 enforce claims.
42 (7) Conduct public and private sales of the
43 property of the establishment.
44 (8) Use assets of the establishment under a
45 liquidation order to transfer obligations of purchase
46 agreements to a solvent establishment, if the transfer
47 can be accomplished without prejudice to the
48 applicable priorities under subsection 18.
49 (9) Acquire, hypothecate, encumber, lease,
50 improve, sell, transfer, abandon, or otherwise dispose

Page 44

1 of or deal with property of the establishment at its
2 market value or upon terms and conditions as are fair
3 and reasonable. The liquidator shall also have power

4 to execute, acknowledge, and deliver deeds,
5 assignments, releases, and other instruments necessary
6 to effectuate a sale of property or other transaction
7 in connection with the liquidation.
8 (10) Borrow money on the security of the
9 establishment's assets or without security and execute
10 and deliver documents necessary to that transaction
11 for the purpose of facilitating the liquidation.
12 Money borrowed pursuant to this subparagraph shall be
13 repaid as an administrative expense and shall have
14 priority over any other class 1 claims under the
15 priority of distribution established in subsection 18.
16 (11) Enter into contracts as necessary to carry
17 out the order to liquidate and affirm or disavow
18 contracts to which the establishment is a party.
19 (12) Continue to prosecute and to institute in the
20 name of the establishment or in the liquidator's own
21 name any and all suits and other legal proceedings, in
22 this state or elsewhere, and to abandon the
23 prosecution of claims the liquidator deems
24 unprofitable to pursue further.
25 (13) Prosecute an action on behalf of the
26 creditors, purchasers, or owners against an officer of
27 the establishment or any other person.
28 (14) Remove records and property of the
29 establishment to the offices of the commissioner or to
30 other places as may be convenient for the purposes of
31 efficient and orderly execution of the liquidation.
32 (15) Deposit in one or more banks in this state
33 sums as are required for meeting current
34 administration expenses and distributions.
35 (16) Unless the court orders otherwise, invest
36 funds not currently needed.
37 (17) File necessary documents for recording in the
38 office of the recorder of deeds or record office in
39 this state or elsewhere where property of the
40 establishment is located.
41 (18) Assert defenses available to the
42 establishment against third persons including statutes
43 of limitations, statutes of fraud, and the defense of
44 usury. A waiver of a defense by the establishment
45 after a petition in liquidation has been filed shall
46 not bind the liquidator.
47 (19) Exercise and enforce the rights, remedies,
48 and powers of a creditor, purchaser, or owner,
49 including the power to avoid transfer or lien that may
50 be given by the general law and that is not included

Page 45

1 within subsections 7 through 9.
2 (20) Intervene in a proceeding wherever instituted

3 that might lead to the appointment of a receiver or
4 trustee, and act as the receiver or trustee whenever
5 the appointment is offered.
6 (21) Exercise powers now held or later conferred
7 upon receivers by the laws of this state which are not
8 inconsistent with this chapter.
9 b. This subsection does not limit the liquidator
10 or exclude the liquidator from exercising a power not
11 listed in paragraph "a" that may be necessary or
12 appropriate to accomplish the purposes of this
13 chapter.
14 4. NOTICE TO CREDITORS AND OTHERS.
15 a. Unless the court otherwise directs, the
16 liquidator shall give notice of the liquidation order
17 as soon as possible by doing both of the following:
18 (1) Mailing notice, by first-class mail, to all
19 persons known or reasonably expected to have claims
20 against the establishment, including purchasers, at
21 their last known address as indicated by the records
22 of the establishment.
23 (2) Publication of notice in a newspaper of
24 general circulation in the county in which the
25 establishment has its principal place of business and
26 in other locations as the liquidator deems
27 appropriate.
28 b. Notice to potential claimants under paragraph
29 "a" shall require claimants to file with the
30 liquidator their claims together with proper proofs of
31 the claim under subsection 13 on or before a date the
32 liquidator shall specify in the notice. Claimants
33 shall keep the liquidator informed of their changes of
34 address, if any.
35 c. If notice is given pursuant to this subsection,
36 the distribution of assets of the establishment under
37 this chapter shall be conclusive with respect to
38 claimants, whether or not a claimant actually received
39 notice.
40 5. ACTIONS BY AND AGAINST LIQUIDATOR.
41 a. After issuance of an order appointing a
42 liquidator of an establishment, an action at law or
43 equity shall not be brought against the establishment
44 within this state or elsewhere, and existing actions
45 shall not be maintained or further presented after
46 issuance of the order. Whenever in the liquidator's
47 judgment, protection of the estate of the
48 establishment necessitates intervention in an action
49 against the establishment that is pending outside this
50 state, the liquidator may intervene in the action.

Page 46

1 The liquidator may defend, at the expense of the

2 estate of the establishment, an action in which the
3 liquidator intervenes under this section.
4 b. Within two years or such additional time as
5 applicable law may permit, the liquidator, after the
6 issuance of an order for liquidation, may institute an
7 action or proceeding on behalf of the estate of the
8 establishment upon any cause of action against which
9 the period of limitation fixed by applicable law has
10 not expired at the time of the filing of the petition
11 upon which the order is entered. If a period of
12 limitation is fixed by agreement for instituting a
13 suit or proceeding upon a claim, or for filing a
14 claim, proof of claim, proof of loss, demand, notice,
15 or the like, or if in a proceeding, judicial or
16 otherwise, a period of limitation is fixed in the
17 proceeding or pursuant to applicable law for taking an
18 action, filing a claim or pleading, or doing an act,
19 and if the period has not expired at the date of the
20 filing of the petition, the liquidator may, for the
21 benefit of the estate, take any action or do any act,
22 required of or permitted to the establishment, within
23 a period of one hundred eighty days subsequent to the
24 entry of an order for liquidation, or within a further
25 period as is shown to the satisfaction of the court
26 not to be unfairly prejudicial to the other party.
27 c. A statute of limitations or defense of laches
28 shall not run with respect to an action against an
29 establishment between the filing of a petition for
30 liquidation against the establishment and the denial
31 of the petition. An action against the establishment
32 that might have been commenced when the petition was
33 filed may be commenced for at least sixty days after
34 the petition is denied.
35 6. COLLECTION AND LIST OF ASSETS.
36 a. As soon as practicable after the liquidation
37 order but not later than one hundred twenty days after
38 such order, the liquidator shall prepare in duplicate
39 a list of the establishment's assets. The list shall
40 be amended or supplemented as the liquidator may
41 determine. One copy shall be filed in the office of
42 the clerk of court, and one copy shall be retained for
43 the liquidator's files. Amendments and supplements
44 shall be similarly filed.
45 b. The liquidator shall reduce the assets to a
46 degree of liquidity that is consistent with the
47 effective execution of the liquidation.
48 c. A submission of a proposal to the court for
49 distribution of assets in accordance with subsection
50 11 fulfills the requirements of paragraph "a".

Page 47

1 7. FRAUDULENT TRANSFERS PRIOR TO PETITION.
2 a. A transfer made and an obligation incurred by
3 an establishment within one year prior to the filing
4 of a successful petition for liquidation under this
5 chapter is fraudulent as to then existing and future
6 creditors if made or incurred without fair
7 consideration, or with actual intent to hinder, delay,
8 or defraud either existing or future creditors. A
9 fraudulent transfer made or an obligation incurred by
10 an establishment ordered to be liquidated under this
11 chapter may be avoided by the liquidator, except as to
12 a person who in good faith is a purchaser, lienor, or
13 obligee for a present fair equivalent value. A
14 purchaser, lienor, or obligee, who in good faith has
15 given a consideration less than present fair
16 equivalent value for such transfer, lien, or
17 obligation, may retain the property, lien, or
18 obligation as security for repayment. The court may,
19 on due notice, order any such transfer, lien, or
20 obligation to be preserved for the benefit of the
21 estate, and in that event, the receiver shall succeed
22 to and may enforce the rights of the purchaser,
23 lienor, or obligee.
24 b. (1) A transfer of property other than real
25 property is made when it becomes perfected so that a
26 subsequent lien obtainable by legal or equitable
27 proceedings on a simple contract could not become
28 superior to the rights of the transferee under
29 subsection 9, paragraph "c".
30 (2) A transfer of real property is made when it
31 becomes perfected so that a subsequent bona fide
32 purchaser from the establishment could not obtain
33 rights superior to the rights of the transferee.
34 (3) A transfer which creates an equitable lien is
35 not perfected if there are available means by which a
36 legal lien could be perfected.
37 (4) A transfer not perfected prior to the filing
38 of a petition for liquidation is deemed to be made
39 immediately before the filing of the successful
40 petition.
41 (5) This subsection applies whether or not there
42 are or were creditors who might have obtained a lien
43 or persons who might have become bona fide purchasers.
44 8. FRAUDULENT TRANSFER AFTER PETITION.
45 a. After a petition for liquidation has been
46 filed, a transfer of real property of the
47 establishment made to a person acting in good faith is
48 valid against the liquidator if made for a present
49 fair equivalent value. If the transfer is not made
50 for a present fair equivalent value, then the transfer

Page 48

1 is valid to the extent of the present consideration
2 actually paid for which amount the transferee shall
3 have a lien on the property transferred. The
4 commencement of a proceeding in liquidation is
5 constructive notice upon the recording of a copy of
6 the petition for or order of liquidation with the
7 recording or deeds in the county where any real
8 property in question is located. The exercise by a
9 court of the United States or a state or jurisdiction
10 to authorize a judicial sale of real property of the
11 establishment within a county in a state shall not be
12 impaired by the pendency of a proceeding unless the
13 copy is recorded in the county prior to the
14 consummation of the judicial sale.
15 b. After a petition for liquidation has been filed
16 and before either the liquidator takes possession of
17 the property of the establishment or an order of
18 liquidation is granted:
19 (1) A transfer of the property, other than real
20 property, of the establishment made to a person acting
21 in good faith is valid against the liquidator if made
22 for a present fair equivalent value. If the transfer
23 was not made for a present fair equivalent value, then
24 the transfer is valid to the extent of the present
25 consideration actually paid for which amount the
26 transferee shall have a lien on the property
27 transferred.
28 (2) If acting in good faith, a person indebted to
29 the establishment or holding property of the
30 establishment may pay the debt or deliver the
31 property, or any part of the property, to the
32 establishment or upon the establishment's order as if
33 the petition were not pending.
34 (3) A person having actual knowledge of the
35 pending liquidation is not acting in good faith.
36 (4) A person asserting the validity of a transfer
37 under this subsection has the burden of proof. Except
38 as provided in this subsection, a transfer by or on
39 behalf of the establishment after the date of the
40 petition for liquidation by any person other than the
41 liquidator is not valid against the liquidator.
42 c. A person receiving any property from the
43 establishment or any benefit of the property of the
44 establishment which is a fraudulent transfer under
45 paragraph "a" is personally liable for the property or
46 benefit and shall account to the liquidator.
47 d. This chapter does not impair the negotiability
48 of currency or negotiable instruments.
49 9. VOIDABLE PREFERENCES AND LIENS.
50 a. (1) A preference is a transfer of the property

Page 49

1 of an establishment to or for the benefit of a
2 creditor for an antecedent debt made or suffered by
3 the establishment within one year before the filing of
4 a successful petition for liquidation under this
5 chapter, the effect of which transfer may be to enable
6 the creditor to obtain a greater percentage of this
7 debt than another creditor of the same class would
8 receive. If a liquidation order is entered while the
9 establishment is already subject to a receivership,
10 then the transfers are preferences if made or suffered
11 within one year before the filing of the successful
12 petition for the receivership, or within two years
13 before the filing of the successful petition for
14 liquidation, whichever time is shorter.
15 (2) A preference may be avoided by the liquidator
16 if any of the following exist:
17 (a) The establishment was insolvent at the time of
18 the transfer.
19 (b) The transfer was made within four months
20 before the filing of the petition.
21 (c) At the time the transfer was made, the
22 creditor receiving it or to be benefited by the
23 transfer or the creditor's agent acting with reference
24 to the transfer had reasonable cause to believe that
25 the establishment was insolvent or was about to become
26 insolvent.
27 (d) The creditor receiving the transfer was an
28 officer, or an employee, attorney, or other person who
29 was in fact in a position of comparable influence in
30 the establishment to an officer whether or not the
31 person held the position of an officer, owner, or
32 other person, firm, corporation, association, or
33 aggregation of persons with whom the establishment did
34 not deal at arm's length.
35 (3) Where the preference is voidable, the
36 liquidator may recover the property. If the property
37 has been converted, the liquidator may recover its
38 value from a person who has received or converted the
39 property. However, if a bona fide purchaser or lienor
40 has given less than the present fair equivalent value,
41 the purchaser or lienor shall have a lien upon the
42 property to the extent of the consideration actually
43 given. Where a preference by way of lien or security
44 interest is voidable, the court may on due notice
45 order the lien or security interest to be preserved
46 for the benefit of the estate, in which event the lien
47 or title shall pass to the liquidator.
48 b. (1) A transfer of property other than real
49 property is made when it becomes perfected so that a
50 subsequent lien obtainable by legal or equitable

Page 50

1 proceedings on a simple contract could not become
2 superior to the rights of the transferee.
3 (2) A transfer of real property is made when it
4 becomes perfected so that a subsequent bona fide
5 purchaser from the establishment could not obtain
6 rights superior to the rights of the transferee.
7 (3) A transfer which creates an equitable lien is
8 not perfected if there are available means by which a
9 legal lien could be created.
10 (4) A transfer not perfected prior to the filing
11 of a petition for liquidation is deemed to be made
12 immediately before the filing of the successful
13 petition.
14 (5) This subsection applies whether or not there
15 are or were creditors who might have obtained liens or
16 persons who might have become bona fide purchasers.
17 c. (1) A lien obtainable by legal or equitable
18 proceedings upon a simple contract is one arising in
19 the ordinary course of the proceedings upon the entry
20 or docketing of a judgment or decree, or upon
21 attachment, garnishment, execution, or like process,
22 whether before, upon, or after judgment or decree and
23 whether before or upon levy. It does not include
24 liens which under applicable law are given a special
25 priority over other liens which are prior in time.
26 (2) A lien obtainable by legal or equitable
27 proceedings may become superior to the rights of a
28 transferee, or a purchaser may obtain rights superior
29 to the rights of a transferee within the meaning of
30 paragraph "b", if such consequences follow only from
31 the lien or purchase itself, or from the lien or
32 purchase followed by a step wholly within the control
33 of the respective lienholder or purchaser, with or
34 without the aid of ministerial action by public
35 officials. However, a lien could not become superior
36 and a purchase could not create superior rights for
37 the purpose of paragraph "b" through an act subsequent
38 to the obtaining of a lien or subsequent to a purchase
39 which requires the agreement or concurrence of any
40 third party or which requires further judicial action
41 or ruling.
42 d. A transfer of property for or on account of a
43 new and contemporaneous consideration, which is under
44 paragraph "b" made or suffered after the transfer
45 because of delay in perfecting it, does not become a
46 transfer for or on account of an antecedent debt if
47 any acts required by the applicable law to be
48 performed in order to perfect the transfer as against
49 liens or a bona fide purchaser's rights are performed
50 within twenty-one days or any period expressly allowed

Page 51

1 by the law, whichever is less. A transfer to secure a
2 future loan, if a loan is actually made, or a transfer
3 which becomes security for a future loan, shall have
4 the same effect as a transfer for or on account of a
5 new and contemporaneous consideration.
6 e. If a lien which is voidable under paragraph
7 "a", subparagraph (2), has been dissolved by the
8 furnishing of a bond or other obligation, the surety
9 of which has been indemnified directly or indirectly
10 by the transfer or the creation of a lien upon
11 property of an establishment before the filing of a
12 petition under this chapter which results in the
13 liquidation order, the indemnifying transfer or lien
14 is also voidable.
15 f. The property affected by a lien voidable under
16 paragraphs "a" and "e" is discharged from the lien.
17 The property and any of the indemnifying property
18 transferred to or for the benefit of a surety shall
19 pass to the liquidator. However, the court may on due
20 notice order a lien to be preserved for the benefit of
21 the estate and the court may direct that the
22 conveyance be executed to evidence the title of the
23 liquidator.
24 g. The court shall have summary jurisdiction of a
25 proceeding by a liquidator to hear and determine the
26 rights of the parties under this section. Reasonable
27 notice of hearing in the proceeding shall be given to
28 all parties in interest, including the obligee of a
29 releasing bond or other like obligation. Where an
30 order is entered for the recovery of indemnifying
31 property in kind or for the avoidance of an
32 indemnifying lien, upon application of any party in
33 interest, the court shall in the same proceeding
34 ascertain the value of the property or lien. If the
35 value is less than the amount for which the property
36 is indemnified or less than the amount of the lien,
37 the transferee or lienholder may elect to retain the
38 property or lien upon payment of its value, as
39 ascertained by the court, to the liquidator within the
40 time as fixed by the court.
41 h. The liability of a surety under a releasing
42 bond or other like obligation is discharged to the
43 extent of the value of the indemnifying property
44 recovered or the indemnifying lien nullified and
45 avoided by the liquidator. Where the property is
46 retained under paragraph "g", the liability of the
47 surety is discharged to the extent of the amount paid
48 to the liquidator.
49 i. If a creditor has been preferred for property
50 which becomes a part of the establishment's estate,

Page 52

1 and afterward in good faith gives the establishment
2 further credit without security of any kind, the
3 amount of the new credit remaining unpaid at the time
4 of the petition may be set off against the preference
5 which would otherwise be recoverable from the
6 creditor.
7 j. If within four months before the filing of a
8 successful petition for liquidation under this
9 chapter, or at any time in contemplation of a
10 proceeding to liquidate, an establishment, directly or
11 indirectly, pays money or transfers property to an
12 attorney for services rendered or to be rendered, the
13 transaction may be examined by the court on its own
14 motion or shall be examined by the court on petition
15 of the liquidator. The payment or transfer shall be
16 held valid only to the extent of a reasonable amount
17 to be determined by the court. The excess may be
18 recovered by the liquidator for the benefit of the
19 estate. However, where the attorney is in a position
20 of influence in the establishment or an affiliate,
21 payment of any money or the transfer of any property
22 to the attorney for services rendered or to be
23 rendered shall be governed by the provisions of
24 paragraph "a", subparagraph (2), subparagraph
25 subdivision (d).
26 k. (1) An officer, manager, employee,
27 shareholder, subscriber, attorney, or other person
28 acting on behalf of the establishment who knowingly
29 participates in giving any preference when the person
30 has reasonable cause to believe the establishment is
31 or is about to become insolvent at the time of the
32 preference is personally liable to the liquidator for
33 the amount of the preference. There is an inference
34 that reasonable cause exists if the transfer was made
35 within four months before the date of filing of this
36 successful petition for liquidation.
37 (2) A person receiving property from the
38 establishment or the benefit of the property of the
39 establishment as a preference voidable under paragraph
40 "a" is personally liable for the property and shall
41 account to the liquidator.
42 (3) This subsection shall not prejudice any other
43 claim by the liquidator against any person.
44 10. CLAIMS OF HOLDER OF VOID OR VOIDABLE RIGHTS.
45 a. A claim of a creditor who has received or
46 acquired a preference, lien, conveyance, transfer,
47 assignment, or encumbrance, voidable under this
48 chapter, shall not be allowed unless the creditor
49 surrenders the preference, lien, conveyance, transfer,
50 assignment, or encumbrance. If the avoidance is

Page 53

1 effected by a proceeding in which a final judgment has
2 been entered, the claim shall not be allowed unless
3 the money is paid or the property is delivered to the
4 liquidator within thirty days from the date of the
5 entering of the final judgment. However, the court
6 having jurisdiction over the liquidation may allow
7 further time if there is an appeal or other
8 continuation of the proceeding.
9 b. A claim allowable under paragraph "a" by reason
10 of a voluntary or involuntary avoidance, preference,
11 lien, conveyance, transfer, assignment, or encumbrance
12 may be filed as an excused late filing under
13 subsection 12, if filed within thirty days from the
14 date of the avoidance or within the further time
15 allowed by the court under paragraph "a".
16 11. LIQUIDATOR'S PROPOSAL TO DISTRIBUTE ASSETS.
17 a. From time to time as assets become available,
18 the liquidator shall make application to the court for
19 approval of a proposal to disburse assets out of
20 marshaled assets.
21 b. The proposal shall at least include provisions
22 for all of the following:
23 (1) Reserving amounts for the payment of all the
24 following:
25 (a) Expenses of administration.
26 (b) To the extent of the value of the security
27 held, the payment of claims of secured creditors.
28 (c) Claims falling within the priorities
29 established in subsection 18, paragraphs "a" and "b".
30 (2) Disbursement of the assets marshaled to date
31 and subsequent disbursement of assets as they become
32 available.
33 c. Action on the application may be taken by the
34 court provided that the liquidator's proposal complies
35 with paragraph "b".
36 12. FILING OF CLAIMS.
37 a. Proof of all claims shall be filed with the
38 liquidator in the form required by subsection 13 on or
39 before the last day for filing specified in the notice
40 required under subsection 4.
41 b. The liquidator may permit a claimant making a
42 late filing to share in distributions, whether past or
43 future, as if the claimant were not late, to the
44 extent that the payment will not prejudice the orderly
45 administration of the liquidation under any of the
46 following circumstances:
47 (1) The existence of the claim was not known to
48 the claimant and the claimant filed the claim as
49 promptly as reasonably possible after learning of it.
50 (2) A transfer to a creditor was avoided under

Page 54

1 subsections 7 through 9, or was voluntarily
2 surrendered under subsection 10, and the filing
3 satisfies the conditions of subsection 10.
4 (3) The valuation under subsection 17 of security
5 held by a secured creditor shows a deficiency, which
6 is filed within thirty days after the valuation.
7 c. The liquidator may consider any claim filed
8 late and permit the claimant to receive distributions
9 which are subsequently declared on any claims of the
10 same or lower priority if the payment does not
11 prejudice the orderly administration of the
12 liquidation. The late-filing claimant shall receive
13 at each distribution the same percentage of the amount
14 allowed on the claim as is then being paid to
15 claimants of any lower priority. This shall continue
16 until the claim has been paid in full.
17 13. PROOF OF CLAIM.
18 a. Proof of claim shall consist of a statement
19 signed by the claimant that includes all of the
20 following that are applicable:
21 (1) The particulars of the claim, including the
22 consideration given for it.
23 (2) The identity and amount of the security on the
24 claim.
25 (3) The payments, if any, made on the debt.
26 (4) A statement that the sum claimed is justly
27 owing and that there is no setoff, counterclaim, or
28 defense to the claim.
29 (5) Any right of priority of payment or other
30 specific right asserted by the claimant.
31 (6) A copy of the written instrument which is the
32 foundation of the claim.
33 (7) The name and address of the claimant and the
34 attorney who represents the claimant, if any.
35 b. A claim need not be considered or allowed if it
36 does not contain all the information identified in
37 paragraph "a" which is applicable. The liquidator may
38 require that a prescribed form be used and may require
39 that other information and documents be included.
40 c. At any time the liquidator may request the
41 claimant to present information or evidence
42 supplementary to that required under paragraph "a",
43 and may take testimony under oath, require production
44 of affidavits or depositions, or otherwise obtain
45 additional information or evidence.
46 d. A judgment or order against an establishment
47 entered after the date of filing of a successful
48 petition for liquidation, or a judgment or order
49 against the establishment entered at any time by
50 default or by collusion need not be considered as

Page 55

1 evidence of liability or of the amount of damages. A
2 judgment or order against an establishment before the
3 filing of the petition need not be considered as
4 evidence of liability or of the amount of damages.
5 14. SPECIAL CLAIMS.
6 a. A claim may be allowed even if contingent, if
7 it is filed pursuant to subsection 12. The claim may
8 be allowed and the claimant may participate in all
9 distributions declared after it is filed to the extent
10 that it does not prejudice the orderly administration
11 of the liquidation.
12 b. Claims that are due except for the passage of
13 time shall be treated as absolute claims are treated.
14 However, the claims may be discounted at the legal
15 rate of interest.
16 c. Claims made under employment contracts by
17 directors, principal officers, or persons in fact
18 performing similar functions or having similar powers
19 are limited to payment for services rendered prior to
20 the issuance of an order of liquidation under
21 subsection 2.
22 15. DISPUTED CLAIMS.
23 a. If a claim is denied in whole or in part by the
24 liquidator, written notice of the determination shall
25 be given to the claimant or the claimant's attorney by
26 first-class mail at the address shown in the proof of
27 claim. Within sixty days from the mailing of the
28 notice, the claimant may file objections with the
29 liquidator. Unless a filing is made, the claimant
30 shall not further object to the determination.
31 b. If objections are filed with the liquidator and
32 the liquidator does not alter the denial of the claim
33 as a result of the objections, the liquidator shall
34 ask the court for a hearing as soon as practicable and
35 give notice of the hearing by first-class mail to the
36 claimant or the claimant's attorney and to any other
37 persons directly affected. The notice shall be given
38 not less than ten nor more than thirty days before the
39 date of hearing. The matter shall be heard by the
40 court or by a court-appointed referee. The referee
41 shall submit findings of fact along with a
42 recommendation.
43 16. CLAIMS OF OTHER PERSON. If a creditor, whose
44 claim against an establishment is secured in whole or
45 in part by the undertaking of another person, fails to
46 prove and file that claim, then the other person may
47 do so in the creditor's name and shall be subrogated
48 to the rights of the creditor, whether the claim has
49 been filed by the creditor or by the other person in
50 the creditor's name to the extent that the other

Page 56

1 person discharges the undertaking. However, in the
2 absence of an agreement with the creditor to the
3 contrary, the other person is not entitled to any
4 distribution until the amount paid to the creditor on
5 the undertaking plus the distributions paid on the
6 claim from the establishment's estate to the creditor
7 equal the amount of the entire claim of the creditor.
8 An excess received by the creditor shall be held by
9 the creditor in trust for the other person.
10 17. SECURED CREDITOR'S CLAIMS.
11 a. The value of the security held by a secured
12 creditor shall be determined in one of the following
13 ways, as the court may direct:
14 (1) By converting the security into money
15 according to the terms of the agreement pursuant to
16 which the security was delivered to the creditors.
17 (2) By agreement, arbitration, compromise, or
18 litigation between the creditor and the liquidator.
19 b. The determination shall be under the
20 supervision and control of the court with due regard
21 for the recommendation of the liquidator. The amount
22 so determined shall be credited upon the secured
23 claim. A deficiency shall be treated as an unsecured
24 claim. If the claimant surrenders the security to the
25 liquidator, the entire claim shall be allowed as if
26 unsecured.
27 18. PRIORITY OF DISTRIBUTION. The priority of
28 distribution of claims from the establishment's estate
29 shall be in accordance with the order in which each
30 class of claims is set forth. Claims in each class
31 shall be paid in full or adequate funds retained for
32 the payment before the members of the next class
33 receive any payment. Subclasses shall not be
34 established within a class. The order of distribution
35 of claims is as follows:
36 a. CLASS 1. The costs and expenses of
37 administration, including but not limited to the
38 following:
39 (1) Actual and necessary costs of preserving or
40 recovering the assets of the establishment.
41 (2) Compensation for all authorized services
42 rendered in the liquidation.
43 (3) Necessary filing fees.
44 (4) Fees and mileage payable to witnesses.
45 (5) Authorized reasonable attorney fees and other
46 professional services rendered in the liquidation.
47 b. CLASS 2. Reasonable compensation to employees
48 for services performed to the extent that they do not
49 exceed two months of monetary compensation and
50 represent payment for services performed within one

Page 57

1 year before the filing of the petition for
2 liquidation. Officers and directors are not entitled
3 to the benefit of this priority. The priority is in
4 lieu of other similar priority which may be authorized
5 by law as to wages or compensation of employees.
6 c. CLASS 3. Claims under purchase agreements.
7 d. CLASS 4. Claims of general creditors.
8 e. CLASS 5. Claims of the federal or of any state
9 or local government. Claims, including those of a
10 governmental body for a penalty or forfeiture, are
11 allowed in this class only to the extent of the
12 pecuniary loss sustained from the act, transaction, or
13 proceeding out of which the penalty or forfeiture
14 arose, with reasonable and actual costs incurred. The
15 remainder of such claims shall be postponed to the
16 class of claims under paragraph "g".
17 f. CLASS 6. Claims filed late or any other claims
18 other than claims under paragraph "g".
19 g. CLASS 7. The claims of shareholders or other
20 owners.
21 19. LIQUIDATOR'S RECOMMENDATIONS TO THE COURT.
22 a. The liquidator shall review claims duly filed
23 in the liquidation and shall make further
24 investigation as necessary. The liquidator may
25 compound, compromise, or in any other manner negotiate
26 the amount for which claims will be recommended to the
27 court except where the liquidator is required by law
28 to accept claims as settled by a person or
29 organization. Unresolved disputes shall be determined
30 under subsection 15. As soon as practicable, the
31 liquidator shall present to the court a report of the
32 claims against the establishment with the liquidator's
33 recommendations. The report shall include the name
34 and address of each claimant and the amount of the
35 claim finally recommended.
36 b. The court may approve, disapprove, or modify
37 the report on claims by the liquidator. Reports not
38 modified by the court within sixty days following
39 submission by the liquidator shall be treated by the
40 liquidator as allowed claims, subject to later
41 modification or to rulings made by the court pursuant
42 to subsection 15. A claim under a policy of insurance
43 shall not be allowed for an amount in excess of the
44 applicable policy limits.
45 20. DISTRIBUTION OF ASSETS. Under the direction
46 of the court, the liquidator shall pay distributions
47 in a manner that will ensure the proper recognition of
48 priorities and a reasonable balance between the
49 expeditious completion of the liquidation and the
50 protection of unliquidated and undetermined claims,

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1 including third-party claims. Distribution of assets
2 in kind may be made at valuations set by agreement
3 between the liquidator and the creditor and approved
4 by the court.
5 21. UNCLAIMED AND WITHHELD FUNDS.
6 a. Unclaimed funds subject to distribution
7 remaining in the liquidator's hands when the
8 liquidator is ready to apply to the court for
9 discharge, including the amount distributable to a
10 creditor, owner, or other person who is unknown or
11 cannot be found, shall be deposited with the treasurer
12 of the state, and shall be paid without interest,
13 except as provided in subsection 18, to the person
14 entitled or to the person's legal representative upon
15 proof satisfactory to the treasurer of state of the
16 right to the funds. Any amount on deposit not claimed
17 within six years from the discharge of the liquidator
18 is deemed to have been abandoned and shall become the
19 property of the state without formal escheat
20 proceedings and be transferred to the insurance
21 division regulatory fund.
22 b. Funds withheld under subsection 14 and not
23 distributed shall upon discharge of the liquidator be
24 deposited with the treasurer of state and paid
25 pursuant to subsection 18. Sums remaining which under
26 subsection 18 would revert to the undistributed assets
27 of the establishment shall be transferred to the
28 insurance division regulatory fund and become the
29 property of the state as provided under paragraph "a",
30 unless the commissioner in the commissioner's
31 discretion petitions the court to reopen the
32 liquidation pursuant to subsection 23.
33 c. Notwithstanding any other provision of this
34 chapter, funds as identified in paragraph "a", with
35 the approval of the court, shall be made available to
36 the commissioner for use in the detection and
37 prevention of future insolvencies. The commissioner
38 shall hold these funds in the insurance division
39 regulatory fund and shall pay without interest, except
40 as provided in subsection 18, to the person entitled
41 to the funds or to the person's legal representative
42 upon proof satisfactory to the commissioner of the
43 person's right to the funds. The funds shall be held
44 by the commissioner for a period of two years at which
45 time the rights and duties to the unclaimed funds
46 shall vest in the commissioner.
47 22. TERMINATION OF PROCEEDINGS.
48 a. When all assets justifying the expense of
49 collection and distribution have been collected and
50 distributed under this chapter, the liquidator shall

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1 apply to the court for discharge. The court may grant
2 the discharge and make any other orders, including an
3 order to transfer remaining funds that are
4 uneconomical to distribute, as appropriate.
5 b. Any other person may apply to the court at any
6 time for an order under paragraph "a". If the
7 application is denied, the applicant shall pay the
8 costs and expenses of the liquidator in resisting the
9 application, including a reasonable attorney fee.
10 23. REOPENING LIQUIDATION. At any time after the
11 liquidation proceeding has been terminated and the
12 liquidator discharged, the commissioner or other
13 interested party may petition the court to reopen the
14 proceedings for good cause including the discovery of
15 additional assets. The court shall order the
16 proceeding reopened if it is satisfied that there is
17 justification for the reopening.
18 24. DISPOSITION OF RECORDS DURING AND AFTER
19 TERMINATION OF LIQUIDATION. If it appears to the
20 commissioner that the records of an establishment in
21 the process of liquidation or completely liquidated
22 are no longer useful, the commissioner may recommend
23 to the court and the court shall direct what records
24 shall be retained for future reference and what
25 records shall be destroyed.
26 25. EXTERNAL AUDIT OF LIQUIDATOR'S BOOKS. The
27 court may order audits to be made of the books of the
28 commissioner relating to a liquidation established
29 under this chapter, and a report of each audit shall
30 be filed with the commissioner and with the court.
31 The books, records, and other documents of the
32 liquidation shall be made available to the auditor at
33 any time without notice. The expense of an audit
34 shall be considered a cost of administration of the
35 liquidation.
36 Sec. . Chapters 523A and 523E, Code 2001, are
37 repealed."
38 2. Title page, line 1, by inserting after the
39 word "Act" the following: "concerning regulated
40 industries under the jurisdiction of the commissioner
41 of insurance,".
42 3. Title page, line 7, by inserting after the
43 word "requirements" the following: ", and relating to
44 cemetery and funeral merchandise and funeral services,
45 establishing permit and purchase agreement
46 requirements, establishing and appropriating fees, and
47 providing administration, enforcement, and liquidation
48 procedures, and penalties".
49 4. By renumbering as necessary.

Hoffman of Crawford offered the following amendment H-1568, to
the committee amendment H-1448, filed by him and moved its
adoption:

H-1568

1 Amend the amendment, H-1448, to Senate File 473, as
2 passed by the Senate, as follows:
3 1. Page 1, by inserting after line 4, the
4 following:
5 ""Sec. . Section 507B.4, subsection 10B,
6 unnumbered paragraph 1, as enacted by 2001 Iowa Acts,
7 Senate File 500, section 7, is amended to read as
8 follows:
9 Failure of an insurer to pay interest at the rate
10 of ten percent per annum on all health insurance
11 claims that the insurer fails to timely accept and pay
12 pursuant to section 507B.4A, subsection 1 2, paragraph
13 ~~"e"~~ "d". Interest shall accrue commencing on the
14 thirty-first day after receipt of all properly
15 completed proof of loss forms.
16 Sec. . Section 518.16, Code 2001, is amended to
17 read as follows:
18 518.16 QUALIFICATION OF AGENTS.
19 A person shall not solicit any application for
20 insurance for an association in this state without
21 having procured from the commissioner of insurance a
22 license authorizing the person to act as an ~~agent~~
23 insurance producer pursuant to chapter ~~522~~ 522B."
24 2. Page 59, by inserting after line 35, the
25 following:
26 "Sec. . Section 537A.10, subsection 1,
27 paragraph c, subparagraph (3), Code 2001, is amended
28 to read as follows:
29 (3) "Franchise" also does not include any contract
30 under which a petroleum retailer or petroleum
31 distributor is authorized or permitted to occupy
32 leased marketing premises, which premises are to be
33 employed in connection with the sale, consignment, or
34 distribution of motor fuel under a trademark which is
35 owned or controlled by a refiner which is regulated by
36 the federal Petroleum Marketing Practices Act, 15
37 U.S.C. � 2801 et seq. The term "refiner" means any
38 person engaged in the refining of crude oil to produce
39 motor fuel, and includes any affiliate of such person.
40 "Franchise" also does not include a contract entered
41 into by any person regulated under chapter 123, 322,
42 322A, 322B, 322C, 322D, 322F, ~~522~~ 522B, or 543B, or a
43 contract establishing a franchise relationship with
44 respect to the sale of construction equipment, lawn or
45 garden equipment, or real estate."

46 3. Page 59, by striking lines 38 through 41 and
47 inserting the following:
48 " . Title page, line 1, by inserting after the
49 word "Act" the following: "concerning regulated
50 industries under the jurisdiction of the commissioner

Page 2

1 of insurance relating to various issues relating to
2 insurance,"."
3 4. By renumbering, redesignating, and correcting
4 internal references as necessary.

Amendment H-1568 was adopted.

Hoffman of Crawford offered the following amendment H-1555, to
the committee amendment H-1448, filed by him and moved its
adoption:

H-1555

1 Amend the amendment, H-1448, to Senate File 473, as
2 passed by the Senate, as follows:
3 1. Page 38, by striking lines 41 through 44 and
4 inserting the following: "matter as deemed
5 appropriate."

Amendment H-1555 was adopted.

Hoffman of Crawford offered the following amendment H-1577, to
the committee amendment H-1448, filed by him and moved its
adoption:

H-1577

1 Amend the amendment, H-1448, to Senate File 473, as
2 passed by the Senate, as follows:
3 1. Page 59, by inserting after line 35 the
4 following:
5 "Sec. . 2001 Iowa Acts, Senate File 500,
6 section 39, is amended to read as follows:
7 SEC. 39. EFFECTIVE DATE. Sections 4, 5, 7 through
8 11, 13 through 22, 34, and 38 of this Act take effect
9 January 1, 2002."
10 2. By renumbering, redesignating, and correcting
11 internal references as necessary.

Amendment H-1577 was adopted.

On motion by Hoffman of Crawford the committee amendment H-
1448, as amended, was adopted.

Hoffman of Crawford moved that the bill be read a last time now
and placed upon its passage which motion prevailed and the bill was
read a last time.

On the question "Shall the bill pass?" (S.F. 473)

The ayes were, 98:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Raecker	Rants
Rayhons	Rekow	Reynolds	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Mr. Speaker
	Siegrist

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title, as amended, was agreed to.

IMMEDIATE MESSAGES

Rants of Woodbury asked and received unanimous consent that
the following bills be immediately messaged to the Senate: Senate
Files 265, 313, 323 and 473.

Senate File 209, a bill for an act providing for livestock, including
the control of paratuberculosis, and providing for penalties, with
report of committee recommending amendment and passage, was
taken up for consideration.

Rekow of Allamakee offered amendment H-1421 filed by the
committee on agriculture as follows:

H-1421

1 Amend Senate File 209, as amended, passed, and
2 reprinted by the Senate, as follows:
3 1. Page 1, by inserting after line 11, the
4 following:
5 " . "Infected" means infected with
6 paratuberculosis as provided in section 165A.3."
7 2. Page 1, line 28, by striking the figure
8 "165A.4." and inserting the following: "165A.5."
9 3. Page 1, by inserting after line 29, the
10 following:
11 "Sec. . NEW SECTION. 165A.3 DETERMINATION OF
12 INFECTION.
13 The department shall adopt rules providing methods
14 and procedures to determine whether cattle are
15 infected, which may include detection and analysis of
16 paratuberculosis using techniques approved by the
17 United States department of agriculture."
18 4. Page 1, line 30, by striking the figure
19 "165A.3" and inserting the following: "165A.4".
20 5. Page 1, line 33, by inserting after the word
21 "department." the following: "A person shall not sell
22 infected cattle other than directly to a slaughtering
23 establishment or to a concentration point for sale
24 directly to a slaughtering establishment, for
25 immediate slaughter. Cattle marked with a letter "J"
26 that are kept at a concentration point must be kept
27 separate and apart."
28 6. Page 1, line 34, by striking the figure
29 "165A.4" and inserting the following: "165A.5".
30 7. Page 2, by inserting after line 13, the
31 following:
32 "___. "Dairy cattle" means cattle belonging to a

33 breed that is used to produce milk for human
34 consumption, including but not limited to holstein and
35 jersey breeds."
36 8. Page 2, line 18, by striking the words "sale
37 barn or".
38 9. Page 2, line 28, by striking the words
39 "livestock upon" and inserting the following: "dairy
40 cattle upon express".
41 10. Page 2, line 29, by striking the word
42 "livestock" and inserting the following: "dairy
43 cattle".
44 11. Page 2, line 30, by striking the word
45 "livestock" and inserting the following: "dairy
46 cattle".
47 12. Page 2, line 31, by inserting after the word
48 "person" the following: "shall not sell the dairy
49 cattle to a purchaser other than a packer and a
50 person".

Page 2

1 13. Page 2, line 32, by striking the word
2 "livestock" and inserting the following: "dairy
3 cattle".
4 14. Page 3, by striking lines 3 and 4, and
5 inserting the following: "The department shall have
6 the same authority to enforce this chapter as it does
7 under chapter 165A. A person who violates section
8 172E.2 is subject to the same penalties as provided in
9 section 165A.5."
10 15. Page 3, line 7, by striking the word
11 "determining" and inserting the following: "advising
12 the department regarding the administration of chapter
13 165A as enacted in this Act, including the adoption of
14 rules providing methods and procedures to determine
15 whether cattle are infected. The task force shall
16 study".
17 16. Page 3, by striking lines 13 through 23, and
18 inserting the following:
19 " . The task force shall be composed of all of
20 the following:
21 a. Persons who represent the department of
22 agriculture and land stewardship. One person shall be
23 the state veterinarian who shall serve as the
24 chairperson of the committee. The secretary of
25 agriculture may appoint up to two more persons if
26 necessary who shall be knowledgeable regarding the
27 control of diseases affecting cattle.
28 b. Persons representing the veterinary college of
29 medicine at Iowa state university who shall be the
30 dean of the college, the head of serology of the
31 department of the veterinary diagnostic laboratory of

32 the veterinary diagnostic and production animal
33 medicine, and the chair of the department of
34 veterinary microbiology and preventative medicine.
35 c. Persons actively engaged in the cattle or dairy
36 industry, including a person actively engaged in
37 producing milk who is appointed by the Iowa dairy
38 products association, a person who is actively engaged
39 in producing dairy products who is appointed by the
40 Iowa dairy products association, a person who is
41 actively engaged in producing beef cattle who is
42 appointed by the Iowa cattlemen's association, and a
43 person actively engaged in marketing cattle who is
44 appointed by the livestock marketing association."
45 17. By renumbering as necessary.

Seng of Scott asked and received unanimous consent to withdraw
amendment H-1631, to the committee amendment H-1421, filed by
him from the floor.

Rekow of Allamakee offered the following amendment H-1589, to
the committee amendment H-1421, filed by him and moved its
adoption:

H-1589

1 Amend the amendment H-1421, to Senate File 209, as
2 amended, passed, and reprinted by the Senate, as
3 follows:
4 1. Page 1, by inserting after line 19 the
5 following:
6 " . Page 1, line 32, by striking the letter
7 ""J"" and inserting the following: ""C""."
8 2. Page 1, line 25, by striking the letter ""J""
9 and inserting the following: ""C"".
10 3. Page 1, line 40, by inserting after the word
11 "express" the following: "written".
12 4. By striking page 1, line 47, through page 2,
13 line 3, and inserting the following:
14 " . Page 2, by striking lines 31 and 32, and
15 inserting the following: "directly to slaughter until
16 sold to a packer. A person shall not knowingly sell
17 the dairy cattle to a purchaser other than to a packer
18 at the livestock market. A person other than a packer
19 shall not knowingly purchase the dairy cattle at the
20 livestock market.""
21 5. Page 2, by striking lines 28 through 34, and
22 inserting the following:
23 " . Persons representing the college of
24 veterinary medicine at Iowa state university who shall
25 be the dean of the college or the dean's designee, the

26 head of serology for the veterinary diagnostic
27 laboratory, the head of the department of veterinary
28 diagnostic and production animal medicine, and the
29 chair of the department of veterinary microbiology and
30 preventive medicine.
31 . A person who is a member or officer of the
32 Iowa veterinary medical association who is appointed
33 by the association."
34 6. By renumbering as necessary.

Amendment H-1589 was adopted.

Kreiman of Davis offered the following amendment H-1584, to the
committee amendment H-1421, filed by him and moved its adoption:

H-1584

1 Amend the amendment, H-1421, to Senate File 209, as
2 amended, passed, and reprinted by the Senate, as
3 follows:
4 1. Page 1, by inserting after line 29, the
5 following:
6 " . Page 2, by inserting after line 10, the
7 following:
8 " . This section does not prevent a person from
9 commencing a civil cause of action based on any right
10 that the person may assert under statute or common
11 law"."
12 2. Page 1, by inserting after line 37, the
13 following:
14 " . Page 2, line 27, by striking the word
15 "LIVESTOCK" and inserting the following: "DAIRY
16 CATTLE"."
17 3. Page 2, by striking lines 5 and 6, and
18 inserting the following: "inserting the following:
19 "1. The department with assistance by the attorney
20 general shall have the same authority to enforce this
21 chapter as it does"."
22 4. Page 2, by inserting after line 9, the
23 following:
24 " . This section does not prevent a person from
25 commencing a civil cause of action based on any right
26 that the person may assert under statute or common
27 law"."
28 5. By renumbering as necessary.

Amendment H-1584 was adopted, placing out of order amendment
H-1475 filed by Kreiman of Davis.

On motion by Rekow of Allamakee the committee amendment H-
1421, as amended, was adopted.

Rekow of Allamakee moved that the bill be read a last time now
and placed upon its passage which motion prevailed and the bill was
read a last time.

On the question "Shall the bill pass?" (S.F. 209)

The ayes were, 96:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Chiodo	Cohoon
Connors	Cormack	De Boef	Dolecheck
Dotzler	Drake	Eddie	Eichhorn
Elgin	Falck	Fallon	Finch
Foege	Ford	Frevert	Garman
Gipp	Greimann	Grundberg	Hahn
Hansen	Hatch	Heaton	Hoffman
Horbach	Houser	Hoversten	Huseman
Huser	Jacobs	Jenkins	Jochum
Johnson	Kettering	Klemme	Kreiman
Kuhn	Larkin	Larson	Lensing
Manternach	Mascher	May	Mertz
Metcalf	Millage	Murphy	Myers
O'Brien	Osterhaus	Petersen	Quirk
Raecker	Rants	Rayhons	Rekow
Reynolds	Richardson	Roberts	Scherrman
Seng	Shey	Shoultz	Sievers
Smith	Stevens	Sukup	Taylor, D.
Taylor, T.	Teig	Tremmel	Tymeson
Tyrrell	Van Engelenhoven	Van Fossen	Warnstadt
Weidman	Winckler	Wise	Mr. Speaker
			Siegrist

The nays were, none.

Absent or not voting, 4:

Carroll	Dix	Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

Senate File 336, a bill for an act relating to the authority of the
state board of educational examiners to develop a code of professional
rights and responsibilities, practices, and ethics for practitioners,
with report of committee recommending amendment and passage,
was taken up for consideration.

Boal of Polk offered amendment H-1439 filed by the committee on
education as follows:

H-1439

1 Amend Senate File 336, as amended, passed, and
2 reprinted by the Senate, as follows:
3 1. Page 1, line 15, by striking the words "second
4 or subsequent".
5 2. Page 1, line 23, by inserting after the figure
6 "~~279.13.~~" the following: "In addressing the failure
7 of a practitioner to fulfill contractual obligations,
8 the board shall consider factors beyond the
9 practitioner's control, including the relocation of a
10 spouse to another geographic area."

Mascher of Johnson offered the following amendment H-1524, to
the committee amendment H-1439, filed by her and moved its
adoption:

H-1524

1 Amend the amendment, H-1439, to Senate File 336, as
2 amended, passed, and reprinted by the Senate, as
3 follows:
4 1. Page 1, by striking lines 3 and 4.

Amendment H-1524 lost.

Mascher of Johnson offered the following amendment H-1511, to
the committee amendment H-1439, filed by her and moved its
adoption:

H-1511

1 Amend the amendment, H-1439, to Senate File 336, as
2 amended, passed, and reprinted by the Senate, as
3 follows:
4 1. Page 1, line 9, by inserting after the word
5 "including" the following: ", but not limited to, the
6 health of the practitioner or of an individual in the

7 practitioner's immediate family, or".

Carroll of Poweshiek in the chair at 3:00 p.m.

Amendment H-1511 lost.

Greimann of Story offered the following amendment H-1516, to the
committee amendment H-1439, filed by her and moved its adoption:

H-1516

1 Amend the amendment, H-1439, to Senate File 336, as
2 amended, passed, and reprinted by the Senate, as
3 follows:
4 1. Page 1, line 9, by inserting after the word
5 "including" the following: ", but not limited to,
6 mental illness or".

Amendment H-1516 lost.

Winckler of Scott offered the following amendment H-1518, to the
committee amendment H-1439, filed by her and moved its adoption:

H-1518

1 Amend the amendment, H-1439, to Senate File 336, as
2 amended, passed, and reprinted by the Senate, as
3 follows:
4 1. Page 1, line 9, by inserting after the word
5 "including" the following: ", but not limited to,
6 economic hardship or".

Amendment H-1518 lost.

Bukta of Clinton offered the following amendment H-1527, to the
committee amendment H-1439, filed by her and moved its adoption:

H-1527

1 Amend the amendment, H-1439, to Senate File 336, as
2 amended, passed, and reprinted by the Senate, as
3 follows:
4 1. Page 1, line 9, by inserting after the word
5 "including" the following: ", but not limited to, a
6 natural disaster or".

Amendment H-1527 lost.

Mascher of Johnson offered the following amendment H-1512, to
the committee amendment H-1439, filed by her and moved its
adoption:

H-1512

1 Amend the amendment, H-1439, to Senate File 336 as
2 amended, passed, and reprinted by the Senate, as
3 follows:
4 1. Page 1, by striking lines 9 and 10 and
5 inserting the following: "practitioner's control.""

Amendment H-1512 was adopted.

On motion by Boal of Polk the committee amendment H-1439, as
amended, was adopted.

Mascher of Johnson offered amendment H-1525 filed by her as
follows:

H-1525

1 Amend Senate File 336, as amended, passed, and
2 reprinted by the Senate, as follows:
3 1. Page 1, by inserting after line 23 the
4 following:
5 "Sec. 2. Section 279.13, subsection 1, unnumbered
6 paragraph 2, Code 2001, is amended to read as follows:
7 The board of directors of a school district shall
8 not offer to enter into or enter into a contract for
9 employment with a teacher who is under contract with
10 another board of directors for the same time period
11 unless the school district that has previously entered
12 into a contract with the teacher releases the teacher,
13 in writing, from the contract. The contract is
14 invalid if the teacher is under contract with another
15 board of directors to teach during the same time
16 period ~~until a release from the other contract is~~
17 ~~achieved~~. The contract shall be signed by the
18 president of the board when tendered, and after it is
19 signed by the teacher, the contract shall be filed
20 with the secretary of the board before the teacher
21 enters into performance under the contract."
22 2. Title page, line 1, by inserting after the
23 word "to" the following: "teaching contracts and".

Boal of Polk rose on a point of order that amendment H-1525 was

not germane.

The Speaker ruled the point well taken and amendment H-1525
not germane.

Mascher of Johnson offered the following amendment H-1526 filed
by her as follows:

H-1526

1 Amend Senate File 336, as amended, passed, and
2 reprinted by the Senate, as follows:
3 1. Page 1, by inserting after line 23 the
4 following:
5 "Sec. . Section 272C.3, subsection 1, Code
6 2001, is amended by adding the following new
7 paragraph:
8 NEW PARAGRAPH. bb. Develop and establish a code
9 of professional rights and responsibilities,
10 practices, and ethics, which shall, among other
11 things, address the failure of a practitioner to
12 fulfill contractual obligations pertaining to the
13 practitioner's employment."
14 2. Title page, lines 1 and 2, by striking the
15 words "the state board of educational examiners" and
16 inserting the following: "state licensing boards".
17 3. Title page, lines 3 and 4, by striking the
18 words "for practitioners".

Boal of Polk rose on a point of order that amendment H-1526 was
not germane.

The Speaker ruled the point well taken and amendment H-1526
not germane.

Boal of Polk moved that the bill be read a last time now and placed
upon its passage which motion prevailed and the bill was read a last
time.

On the question "Shall the bill pass?" (S.F. 336)

The ayes were, 61:

Alons	Arnold	Barry	Baudler
Bell	Boal	Boddicker	Bradley
Brauns	Broers	Brunkhorst	Cohoon
Cormack	De Boef	Dix	Dolecheck
Drake	Eddie	Eichhorn	Elgin
Fallon	Finch	Garman	Gipp
Grundberg	Hahn	Hansen	Heaton
Hoffman	Horbach	Houser	Hoversten
Huseman	Jacobs	Jenkins	Johnson
Kettering	Klemme	Larson	Manternach
Mertz	Metcalf	Millage	O'Brien
Raecker	Rants	Rayhons	Rekow
Roberts	Shey	Siegrist, Spkr.	Sievers
Sukup	Teig	Tymeson	Tyrrell
Van Engelenhoven	Van Fossen	Weidman	Wise
Carroll,
Presiding

The nays were, 37:

Atteberry	Boggess	Bukta	Chiodo
Connors	Dotzler	Falck	Foege
Ford	Frevert	Greimann	Hatch
Huser	Jochum	Kreiman	Kuhn
Larkin	Lensing	Mascher	May
Murphy	Myers	Osterhaus	Petersen
Quirk	Reynolds	Richardson	Scherrman
Seng	Shoultz	Smith	Stevens
Taylor, D.	Taylor, T.	Tremmel	Warnstadt
Winckler

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

Senate File 354, a bill for an act relating to limitations on filing
medical assistance claims against a decedent's estate, with report of
committee recommending passage, was taken up for consideration.

Millage of Scott moved that the bill be read a last time now and
placed upon its passage which motion prevailed and the bill was read
a last time.

On the question "Shall the bill pass?" (S.F. 354)

The ayes were, 98:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Chiodo	Cohoon
Connors	Cormack	De Boef	Dix
Dolecheck	Dotzler	Drake	Eddie
Eichhorn	Elgin	Falck	Fallon
Finch	Foege	Ford	Frevert
Garman	Gipp	Greimann	Grundberg
Hahn	Hansen	Hatch	Heaton
Hoffman	Horbach	Houser	Hoversten
Huseman	Huser	Jacobs	Jenkins
Jochum	Johnson	Kettering	Klemme
Kreiman	Kuhn	Larkin	Larson
Lensing	Manternach	Mascher	May
Mertz	Metcalf	Millage	Murphy
Myers	O'Brien	Osterhaus	Petersen
Quirk	Raecker	Rants	Rayhons
Rekow	Reynolds	Richardson	Roberts
Scherrman	Seng	Shey	Shoultz
Siegrist, Spkr.	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Carroll,
	Presiding

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

Speaker Siegrist in the chair at 3:50 p.m.

Senate File 412, a bill for an act relating to the compulsory
attendance age and attendance at school during the regular school
calendar by a child who has reached the age of sixteen, with report of
committee recommending passage, was taken up for consideration.

Mascher of Johnson offered amendment H-1531 filed by her as
follows:

H-1531

1 Amend Senate File 412, as amended, passed, and
2 reprinted by the Senate, as follows:
3 1. Page 1, by inserting before line 1 the
4 following:
5 "Section 1. NEW SECTION. 280.28 POTENTIAL
6 DROPOUT DECISION-MAKING ASSISTANCE POLICY.
7 The board of directors of a school district and the
8 authorities in charge of an accredited nonpublic
9 school shall adopt a potential dropout decision-making
10 assistance policy to inform students who are potential
11 school dropouts and are no longer of compulsory
12 attendance age of the problems the students may
13 encounter as school dropouts and of alternative
14 educational options.
15 Under the policy, the school board or the
16 authorities in charge of an accredited nonpublic
17 school shall provide to a student, when a student is
18 identified as being at risk of dropping out or at
19 least twenty-four hours before the student is
20 anticipated to drop out of school, information by
21 videotape about the problems that research indicates
22 dropouts are likely to encounter and about the
23 alternative educational options offered by the school
24 district or school or by any other educational
25 institution in the area, as appropriate. The school
26 board and authorities in charge of an accredited
27 nonpublic school shall also provide to the student a
28 certification and consent form to be signed by the
29 student verifying that the student was offered a
30 viewing of the videotape. The student shall also
31 attain the signature of the student's parent or legal
32 guardian to document that the parent or legal guardian
33 consents to the student's intention to drop out of
34 school."
35 2. By renumbering as necessary.

Mascher of Johnson offered the following amendment H-1607, to
amendment H-1531, filed by her and moved its adoption:

H-1607

1 Amend the amendment, H-1531, to Senate File 412, as
2 passed by the Senate, as follows:
3 1. Page 1, lines 1 and 2, by striking the words
4 "amended, passed, and reprinted" and inserting the
5 following: "passed".
6 " . Page 1, by inserting before line 5, the
7 following:
8 ""Section 1. Section 256.9, subsection 43, Code
9 2001, is amended to read as follows:

10 43. a. Prepare a plan and a report for ensuring
11 that all Iowa children will be able to satisfy the
12 requirements for high school graduation. The plan and
13 report shall include a statement of the dimensions of
14 the dropout problem in Iowa; a survey of existing
15 programs geared to dropout prevention; a plan for use
16 of competency-based outcome methods and measures;
17 proposals for alternative means for satisfying
18 graduation requirements including alternative high
19 school settings, supervised vocational experiences,
20 education experiences within the correctional system,
21 screening and assessment mechanisms for identifying
22 students who are at risk of dropping out and the
23 development of an individualized education plan for
24 identified students; a requirement that schools
25 provide information to students who drop out of school
26 on options for pursuing education at a later date; the
27 development of basic materials and information for
28 schools to present to students leaving school; a
29 requirement that students notify their school
30 districts of residence when the student discontinues
31 school, including the reasons for leaving school and
32 future plans for career development; a requirement
33 that, unless a student chooses to make the information
34 relating to the student leaving school confidential,
35 schools make the information available to community
36 colleges, area education agencies, and other
37 educational institutions upon request; recommendations
38 for the establishment of pilot projects for the
39 development of model alternative options education
40 programs; a plan for implementation of any recommended
41 courses of action to attain a zero dropout rate by the
42 year 2000; and other requirements necessary to achieve
43 the goals of this subsection. Alternative means for
44 satisfying graduation requirements which relate to the
45 development of individualized education plans for
46 students who have dropped out of the regular school
47 program shall include, but are not limited to, a
48 tracking component that requires a school district to
49 maintain periodic contact with a student, assistance
50 to a dropout in curing any of the student's academic

Page 2

1 deficiencies, an assessment of the student's
2 employability skills and plans to improve those
3 skills, and treatment or counseling for a student's
4 social needs. The department shall also prepare a
5 cost estimate associated with implementation of
6 proposals to attain a zero dropout rate, including but
7 not limited to evaluation of existing funding sources
8 and a recommended allocation of the financial burden

9 among federal, state, local, and family resources.
10 b. The department shall prepare and distribute to
11 school districts and accredited nonpublic schools upon
12 request a video, the audience for which shall be
13 students who are at risk of dropping out. The video
14 shall illustrate the problems that research indicates
15 dropouts are likely to encounter and shall provide
16 information regarding the various alternative
17 education options that may be available to a student,
18 including alternative means for satisfying graduation
19 requirements, alternative high school settings,
20 supervised vocational experiences, and options for
21 pursuing education at a later date. The video shall
22 also document and illustrate the increased
23 employability of a student who meets the challenge of
24 progressing through secondary and postsecondary
25 educational experiences. The department is encouraged
26 to seek funding assistance from the private sector for
27 the cost of producing and distributing the video."
28 2. Page 1, by striking lines 22 through 25, and
29 inserting the following: "students who drop out of
30 school are likely to encounter and about alternative
31 educational options that may be available to the
32 student. The school"."
33 3. Page 1, by inserting after line 34, the
34 following:
35 " . Title page, line 3, by inserting after the
36 word "sixteen" the following: ", and directing the
37 department of education and public and accredited
38 nonpublic schools to provide information to students
39 who are at risk of dropping out of school"."

Amendment H-1607 was adopted.

Finch of Story rose on a point of order that amendment H-1531, as
amended, was not germane.

The Speaker ruled the point well taken and amendment H-1531,
as amended, not germane.

Mascher of Johnson offered amendment H-1473 filed by her and
requested division as follows:

H-1473

1 Amend Senate File 412, as passed by the Senate, as
2 follows:

H-1473A

3 1. Page 1, by striking lines 4 through 9 and
4 inserting the following: "A child who has reached the
5 age of six by September 15 and is under sixteen years
6 of age ~~by September 15~~ is of compulsory attendance
7 age."

H-1473B

8 2. Page 1, by inserting before line 10 the
9 following:
10 "If a child who reaches the age of sixteen during
11 the regular school calendar chooses to withdraw from
12 the school of attendance prior to the end of the
13 regular school calendar, the school district and
14 accredited nonpublic school in which the pupil was
15 enrolled shall provide the pupil with information
16 regarding alternative education options offered by the
17 school district or school or by any other educational
18 institution in the area as appropriate."

Mascher of Johnson moved the adoption of amendment H-1473A.

Amendment H-1473A lost.

Mascher of Johnson moved the adoption of amendment H-1473B.

Amendment H-1473B lost.

Finch of Story moved that the bill be read a last time now and
placed upon its passage which motion prevailed and the bill was read
a last time.

On the question "Shall the bill pass?" (S.F. 412)

The ayes were, 67:

Alons	Barry	Baudler	Bell
Boal	Boddicker	Boggess	Bradley
Brauns	Broers	Brunkhorst	Carroll
Chiodo	Cohoon	Connors	Cormack
De Boef	Dix	Dolecheck	Elgin
Fallon	Finch	Ford	Gipp
Greimann	Grundberg	Hahn	Hansen
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Johnson	Kettering	Klemme
Kreiman	Kuhn	Larkin	Larson
Manternach	May	Mertz	Metcalf
Millage	Quirk	Rants	Rayhons
Rekow	Reynolds	Roberts	Shey
Sievers	Sukup	Teig	Tremmel
Tymeson	Tyrrell	Van Engelenhoven	Van Fossen
Weidman	Wise	Mr. Speaker
		Siegrist

The nays were, 30:

Arnold	Atteberry	Bukta	Dotzler
Drake	Eddie	Eichhorn	Falck
Foege	Frevert	Garman	Hatch
Jochum	Lensing	Mascher	Murphy
Myers	O'Brien	Osterhaus	Petersen
Richardson	Scherrman	Seng	Shoultz
Smith	Stevens	Taylor, D.	Taylor, T.
Warnstadt	Winckler

Absent or not voting, 3:

Raecker	Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

IMMEDIATE MESSAGES

Rants of Woodbury asked and received unanimous consent that
the following bills be immediately messaged to the Senate: Senate
Files 209, 336, 354 and 412.

MESSAGE FROM THE SENATE

The following message was received from the Senate:

Mr. Speaker: I am directed to inform your honorable body that the Senate has on
April 23, 2001, passed the following bill in which the concurrence of the House is asked:

Senate File 526, a bill for an act excluding certain business property from being
considered abandoned property under the state's disposition of unclaimed property law.

MICHAEL E. MARSHALL, Secretary

Senate File 466, a bill for an act relating to child care and
protection public policy provisions involving children, with report of

committee recommending amendment and passage, was taken up for
consideration.

Brunkhorst of Bremer offered the following amendment H-1446
filed by the committee on human resources and moved its adoption:

H-1446

1 Amend Senate File 466, as passed by the Senate, as
2 follows:
3 1. Page 1, line 11, by striking the word "made,"
4 the following: "made".
5 2. Page 1, by striking lines 15 through 21 and
6 inserting the following:
7 "b. If a person with a controlling interest in a
8 child care home or facility or an employee of a child
9 care home or facility assigned financial management
10 responsibilities for the child care home or facility
11 has been found in a criminal proceeding to have
12 obtained by fraudulent means, public funding for the
13 provision of child care by the home or facility in an
14 amount equal to or in excess of the minimum amount
15 necessary to constitute a fraudulent practice in the
16 second degree under section 714.10, subsection 1, the
17 following shall apply:
18 (1) For a first offense, for a period of one year,
19 any child care home or facility in which the offender
20 continues to have a controlling interest or at which
21 the offender remains employed as a financial manager
22 shall be ineligible to receive public funding for the
23 provision of child care.
24 (2) For a second offense committed by the same
25 offender or by an employee assigned financial
26 management responsibilities employed at the same child
27 care home or facility at which a first offense
28 occurred, for a period of five years, the child care
29 home or facility at which the second offense occurred
30 shall be ineligible to receive public funding for the
31 provision of child care.
32 (3) For a third offense committed by the same
33 offender or by an employee assigned financial
34 management responsibilities employed at the same child
35 care home or facility at which a first and second
36 offense occurred, the child care home or facility at
37 which the third offense occurred shall be ineligible
38 to receive public funding for provision of child care.
39 The department shall adopt rules to administer this
40 subsection and the rules shall provide for a
41 transition period before applying the requirements of
42 this subsection in order to allow the ownership or

43 employment prohibitions to be addressed without
44 interrupting the provision of child care and for
45 requiring, as a condition of providing public funding,
46 that a child care home or facility at which an offense
47 described in this paragraph "b" occurred must submit
48 periodic financial audits to the department."
49 3. Page 1, by inserting after line 31, the
50 following:

Page 2

1 "d. If the director determines that the
2 ineligibility of a child care home or facility to
3 receive public funding pursuant to paragraph "b" will
4 cause the provision of child care services by that
5 home or facility to be interrupted or to become no
6 longer available, the director may file a verified
7 application in the district court of the county in
8 which the child care home or facility is located,
9 requesting that an individual nominated by the
10 director be appointed as receiver for the child care
11 home or facility until continuation of the child care
12 services is assured.
13 (1) The court shall expeditiously hold a hearing
14 on the application, at which the director shall
15 present evidence in support of the application. The
16 owner of the child care home or facility against which
17 the application is filed may also present evidence,
18 and both parties may subpoena witnesses. The court
19 may appoint a receiver for the child care home or
20 facility in advance of the hearing if the director's
21 verified application states that an emergency exists
22 in which closure of the child care home or facility is
23 imminent. If the owner against whose facility the
24 receivership application is filed informs the court at
25 or before the time set for the hearing that the owner
26 does not object to the application, the court shall
27 waive the hearing and at once appoint a receiver for
28 the child care home or facility.
29 (2) The court, on the basis of the verified
30 application and evidence presented at the hearing, may
31 order the child care home or facility placed under
32 receivership, and if so ordered, the court shall
33 direct either that the receiver assume the duties of
34 administrator of the child care home or facility or
35 that the receiver supervise the child care home's or
36 facility's administrator in conducting the day-to-day
37 business of the child care home or facility. The
38 receiver shall be empowered to control the child care
39 home's or facility's financial resources and to apply
40 its revenues as the receiver deems necessary to
41 continue the operation of the child care home or

42 facility in compliance with this chapter and the rules
43 adopted under this chapter, but shall be accountable
44 to the court for management of the child care home's
45 or facility's financial resources.
46 (3) A receivership established under this
47 paragraph "d" may be terminated by the district court
48 which established it, after a hearing upon an
49 application for termination.
50 (4) Payment of the expenses of a receivership

Page 3

1 established under this paragraph "d" is the
2 responsibility of the child care home or facility for
3 which the receiver is appointed, unless the court
4 directs otherwise. The expenses include, but are not
5 limited to:
6 (a) Salary of the receiver.
7 (b) Expenses incurred for the continued child care
8 services.
9 (c) Expenses incurred for the maintenance of
10 buildings and grounds of the child care home or
11 facility.
12 (d) Expenses incurred in the ordinary course of
13 business, such as employee salaries and accounts
14 payable.
15 (5) The receiver is not personally liable for the
16 expenses of the child care home or facility during the
17 receivership. The receiver is an employee of the
18 state as defined in section 669.2, subsection 4, only
19 for the purpose of defending a claim filed against the
20 receiver. Chapter 669 applies to all suits filed
21 against the receiver.
22 (6) This lettered paragraph "d" does not do any of
23 the following:
24 (a) Preclude the sale or lease of a child care
25 home or facility while the child care home or facility
26 is in receivership, provided these actions are not
27 taken without approval of the receiver.
28 (b) Affect the civil or criminal liability of the
29 owner of the child care home or facility placed in
30 receivership, for any acts or omissions of the owner
31 which occurred before the receiver was appointed.
32 Sec. . SUBSEQUENT OFFENSES. For the purposes
33 of administering section 237A.29, subsection 2, as
34 enacted by this Act, if a person with a controlling
35 interest in a child care home or facility or an
36 employee of a child care home or facility assigned
37 financial management responsibilities for the child
38 care home or facility was found in a criminal
39 proceeding to have obtained by fraudulent means during
40 the two-year period preceding July 1, 2001, public

41 funding for the child care home or facility in an
42 amount equal to or in excess of the minimum amount
43 necessary to constitute fraudulent practice in the
44 second degree under section 714.10, subsection 1, the
45 department of human services shall consider the first
46 subsequent offense for obtaining by fraudulent means
47 public funding for child care in such an amount and
48 committed by such person or by such an employee of
49 such home or facility on or after July 1, 2001, as
50 found in a criminal proceeding, to be a second offense

Page 4

1 and a second or greater subsequent offense to be a
2 third offense under section 237A.29, subsection 2."
3 4. Title page, by striking lines 1 and 2, and
4 inserting the following: "An Act relating to the
5 eligibility of certain child care providers connected
6 with the commitment of a fraudulent act involving
7 public child care funding to receive further public
8 funding."
9 5. By renumbering as necessary.

The committee amendment H-1446 was adopted.

Brunkhorst of Bremer moved that the bill be read a last time now
and placed upon its passage which motion prevailed and the bill was
read a last time.

On the question "Shall the bill pass?" (S.F. 466)

The ayes were, 97:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Rants	Rayhons
Rekow	Reynolds	Richardson	Roberts
Scherrman	Seng	Shey	Shoultz
Sievers	Smith	Stevens	Sukup
Taylor, D.	Taylor, T.	Teig	Tremmel
Tymeson	Tyrrell	Van Engelenhoven	Van Fossen
Warnstadt	Weidman	Winckler	Wise
Mr. Speaker
Siegrist

The nays were, none.

Absent or not voting, 3:

Raecker	Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title, as amended, was agreed to.

Senate File 470, a bill for an act relating to the regulation of
infectious and contagious diseases in animals, and providing for
penalties, with report of committee recommending passage, was
taken up for consideration.

Kreiman of Davis offered the following amendment H-1616 filed by
him and moved its adoption:

H-1616

1 Amend Senate File 470, as passed by the Senate, as
2 follows:
3 1. Page 3, by inserting after line 26, the
4 following:
5 "Sec. . NEW SECTION. 163.53 PRIVATE CAUSES OF
6 ACTION.
7 This chapter does not prevent a person from
8 commencing a civil cause of action based on any right
9 that the person may assert under statute or common
10 law."
11 2. By renumbering as necessary.

Amendment H-1616 was adopted.

Manternach of Jones moved that the bill be read a last time now
and placed upon its passage which motion prevailed and the bill was
read a last time.

On the question "Shall the bill pass?" (S.F. 470)

The ayes were, 97:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Rants	Rayhons
Rekow	Reynolds	Richardson	Roberts
Scherrman	Seng	Shey	Shoultz
Sievers	Smith	Stevens	Sukup
Taylor, D.	Taylor, T.	Teig	Tremmel
Tymeson	Tyrrell	Van Engelenhoven	Van Fossen
Warnstadt	Weidman	Winckler	Wise
Mr. Speaker
Siegrist

The nays were, none.

Absent or not voting, 3:

Raecker	Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

Ways and Means Calendar

House File 713, a bill for an act relating to the administration of
county government by providing for the issuance of certain lease or
lease-purchase contracts, the recording of certain property transfers,
the striking of a requirement to record returns of marriage with real
estate recordings, the imposition of a real estate installment contract
fee, and changing the date for reporting and paying agricultural land

tax credits and family farm tax credits, was taken up for
consideration.

Sievers of Scott moved that the bill be read a last time now and
placed upon its passage which motion prevailed and the bill was read
a last time.

On the question "Shall the bill pass?" (H.F. 713)

The ayes were, 98:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Raecker	Rants
Rayhons	Rekow	Reynolds	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Mr. Speaker
	Siegrist

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

HOUSE INSISTS

Baudler of Adair called up for consideration Senate File 346, a
bill for an act relating to the department of corrections by providing
for the use of deadly force by correctional or peace officers, for
submission of presentence investigation reports to the department,
for establishing a training fund in the department, for transcription
and recording of testimony for certain investigations conducted by the
department of corrections, and for purchases by a department or
agency from Iowa state industries, and moved that the House insist
on its amendment, which motion prevailed.

CONFERENCE COMMITTEE APPOINTED
(Senate File 346)

The Speaker announced the appointment of the conference
committee to consider the differences between the House and Senate
concerning Senate File 346: Baudler of Adair, Chair; Larson of Linn,
Eichhorn of Hamilton, Kreiman of Davis and Tremmel of Wapello.

IMMEDIATE MESSAGES

Rants of Woodbury asked and received unanimous consent that
the following bills be immediately messaged to the Senate: House
File 713, and Senate Files 466 and 470.

SENATE AMENDMENTS CONSIDERED

Kettering of Sac called up for consideration House File 271, a bill
for an act adding specified document preparation and modification to
the list of acts defining the activities of a real estate broker, amended
by the Senate, and moved that the House concur in the following
Senate amendment H-1624:

H-1624

1 Amend House File 271, as amended, passed, and
2 reprinted by the House, as follows:
3 1. Page 1, by inserting after line 9, the
4 following: "A licensee shall not compensate a person
5 or another licensee for recommending, referring, or
6 securing a client."
7 2. Title page, by striking line 1 and inserting

8 the following: "An Act relating to".

The motion prevailed and the House concurred in the Senate
amendment H-1624.

Kettering of Sac moved that the bill, as amended by the Senate
and concurred in by the House, be read a last time now and placed
upon its passage which motion prevailed and the bill was read a last
time.

On the question "Shall the bill pass?" (H.F. 271)

The ayes were, 97:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dotzler	Drake	Eddie
Eichhorn	Elgin	Falck	Fallon
Finch	Foege	Ford	Frevert
Garman	Gipp	Greimann	Grundberg
Hahn	Hansen	Hatch	Heaton
Hoffman	Horbach	Houser	Hoversten
Huseman	Huser	Jacobs	Jenkins
Jochum	Johnson	Kettering	Klemme
Kreiman	Kuhn	Larkin	Larson
Lensing	Manternach	Mascher	May
Mertz	Metcalf	Millage	Murphy
Myers	O'Brien	Osterhaus	Petersen
Quirk	Raecker	Rants	Rayhons
Rekow	Reynolds	Richardson	Roberts
Scherrman	Seng	Shey	Shoultz
Sievers	Smith	Stevens	Sukup
Taylor, D.	Taylor, T.	Teig	Tremmel
Tymeson	Tyrrell	Van Engelenhoven	Van Fossen
Warnstadt	Weidman	Winckler	Wise
Mr. Speaker
Siegrist

The nays were, none.

Absent or not voting, 3:

Dolecheck	Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title, as amended, was agreed to.

Eichhorn of Hamilton called up for consideration House File 73, a
bill for an act relating to the powers and duties of the executive
director of the commission of veterans affairs by providing for the
recognition of honor guard units of veterans organizations to perform
honor guard services, amended by the Senate, and moved that the
House concur in the following Senate amendment H-1553:

H-1553

1 Amend House File 73, as passed by the House, as
2 follows:
3 1. By striking everything after the enacting
4 clause and inserting the following:
5 "Section 1. NEW SECTION. 35A.12 MILITARY
6 VETERANS HONOR GUARD SERVICES.
7 An honor guard unit made up of members of a
8 recognized military veterans organization as listed in
9 section 35A.2 or 37.2 shall be allowed to perform any
10 honor guard service on public property."
11 2. Title page, by striking lines 1 through 4 and
12 inserting the following: "An Act relating to the
13 performance of honor guard services on public property
14 by recognized military veterans organizations."

The motion prevailed and the House concurred in the Senate
amendment H-1553.

Eichhorn of Hamilton moved that the bill, as amended by the
Senate and concurred in by the House, be read a last time now and
placed upon its passage which motion prevailed and the bill was read
a last time.

On the question "Shall the bill pass?" (H.F. 73)

The ayes were, 95:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Chiodo	Cohoon
Connors	Cormack	De Boef	Dix
Dotzler	Drake	Eddie	Eichhorn
Elgin	Falck	Finch	Foege
Ford	Frevert	Garman	Gipp
Greimann	Grundberg	Hahn	Hansen
Hatch	Heaton	Hoffman	Horbach
Houser	Hoversten	Huseman	Huser
Jacobs	Jenkins	Jochum	Johnson
Kettering	Klemme	Kreiman	Kuhn
Larkin	Larson	Lensing	Manternach
Mascher	May	Mertz	Metcalf
Millage	Murphy	Myers	O'Brien
Osterhaus	Petersen	Quirk	Raecker
Rants	Rayhons	Rekow	Reynolds
Richardson	Roberts	Scherrman	Seng
Shey	Shoultz	Sievers	Smith
Stevens	Sukup	Taylor, D.	Taylor, T.
Teig	Tremmel	Tymeson	Tyrrell
Van Engelenhoven	Van Fossen	Warnstadt	Weidman
Winckler	Wise	Mr. Speaker
		Siegrist

The nays were, 1:

Fallon

Absent or not voting,4:

Carroll	Dolecheck	Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title, as amended, was agreed to.

Shey of Linn called up for consideration House File 229, a bill for
an act relating to judicial district departments of correctional services
by providing for a restitution lien for supervision fees and for the
establishment of a reserve peace officer force, amended by the Senate,
and moved that the House concur in the following Senate amendment
H-1575:

H-1575

1 Amend House File 229, as amended, passed, and
2 reprinted by the House, as follows:
3 1. By striking page 3, line 27, through page 7,
4 line 25.
5 2. Title page, lines 2 and 3, by striking the
6 words "a restitution lien for supervision fees and
7 for".

The motion prevailed and the House concurred in the Senate
amendment H-1575.

Shey of Linn moved that the bill, as amended by the Senate and
concurred in by the House, be read a last time now and placed upon
its passage which motion prevailed and the bill was read a last time.

On the question "Shall the bill pass?" (H.F. 229)

The ayes were, 97:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dotzler	Drake	Eddie
Eichhorn	Elgin	Falck	Fallon
Finch	Foege	Ford	Frevert
Garman	Gipp	Greimann	Grundberg
Hahn	Hansen	Hatch	Heaton
Hoffman	Horbach	Houser	Hoversten
Huseman	Huser	Jacobs	Jenkins
Jochum	Johnson	Kettering	Klemme
Kreiman	Kuhn	Larkin	Larson
Lensing	Manternach	Mascher	May
Mertz	Metcalf	Millage	Murphy
Myers	O'Brien	Osterhaus	Petersen
Quirk	Raecker	Rants	Rayhons
Rekow	Reynolds	Richardson	Roberts
Scherrman	Seng	Shey	Shoultz
Sievers	Smith	Stevens	Sukup
Taylor, D.	Taylor, T.	Teig	Tremmel
Tymeson	Tyrrell	Van Engelenhoven	Van Fossen
Warnstadt	Weidman	Winckler	Wise
Mr. Speaker
Siegrist

The nays were, none.

Absent or not voting, 3:

Dolecheck	Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title, as amended, was agreed to.

Tymeson of Madison called up for consideration House File 674, a
bill for an act relating to the reorganization or dissolution of an area
education agency, amended by the Senate, and moved that the House
concur in the following Senate amendment H-1592:

H-1592

1 Amend House File 674, as passed by the House, as
2 follows:
3 1. Page 1, by inserting before line 1 the
4 following:
5 "Section 1. Section 273.10, subsection 3,
6 unnumbered paragraph 2, Code 2001, is amended to read
7 as follows:
8 Approval, if granted, shall be for a term of ~~three~~
9 five years. However, the state board may grant
10 conditional approval for a term of less than ~~three~~
11 five years if conditions warrant."
12 2. Title page, line 1, by inserting after the
13 word "the" the following: "accreditation and".
14 3. By renumbering as necessary.

The motion prevailed and the House concurred in the Senate
amendment H-1592.

Tymeson of Madison moved that the bill, as amended by the
Senate and concurred in by the House, be read a last time now and
placed upon its passage which motion prevailed and the bill was read
a last time.

On the question "Shall the bill pass?" (H.F. 674)

The ayes were, 98:

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Raecker	Rants
Rayhons	Rekow	Reynolds	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Mr. Speaker
	Siegrist

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

Alons	Arnold	Atteberry	Barry
Baudler	Bell	Boal	Boddicker
Boggess	Bradley	Brauns	Broers
Brunkhorst	Bukta	Carroll	Chiodo
Cohoon	Connors	Cormack	De Boef
Dix	Dolecheck	Dotzler	Drake
Eddie	Eichhorn	Elgin	Falck
Fallon	Finch	Foege	Ford
Frevert	Garman	Gipp	Greimann
Grundberg	Hahn	Hansen	Hatch
Heaton	Hoffman	Horbach	Houser
Hoversten	Huseman	Huser	Jacobs
Jenkins	Jochum	Johnson	Kettering
Klemme	Kreiman	Kuhn	Larkin
Larson	Lensing	Manternach	Mascher
May	Mertz	Metcalf	Millage
Murphy	Myers	O'Brien	Osterhaus
Petersen	Quirk	Raecker	Rants
Rayhons	Rekow	Reynolds	Richardson
Roberts	Scherrman	Seng	Shey
Shoultz	Sievers	Smith	Stevens
Sukup	Taylor, D.	Taylor, T.	Teig
Tremmel	Tymeson	Tyrrell	Van Engelenhoven
Van Fossen	Warnstadt	Weidman	Winckler
Wise	Mr. Speaker
	Siegrist

The nays were, none.

Absent or not voting, 2:

Schrader	Witt

The bill having received a constitutional majority was declared to
have passed the House and the title was agreed to.

IMMEDIATE MESSAGE

Rants of Woodbury asked and received unanimous consent that
Senate File 525 be immediately messaged to the Senate.

INTRODUCTION OF BILL

House File 733, by committee on ways and means, a bill for an
act relating to the Iowa individual health benefit reinsurance
association and the Iowa comprehensive health insurance association,
by changing the board of directors, membership, and assessment
related to the associations, and making changes related to
adjustments in the coverage of basic and standard health benefit
plans.

Read first time and placed on the ways and means calendar.

SENATE MESSAGE CONSIDERED

Senate File 526, by committee on ways and means, a bill for an
act excluding certain business property from being considered
abandoned property under the state's disposition of unclaimed
property law.

Read first time and passed on file.

SENATE FILE 184 PASSED ON FILE

The Speaker announced that Senate File 184, previously referred to
committee on ways and means was passed on file.

EXPLANATIONS OF VOTE

I was necessarily absent from the House chamber on April 23, 2001.
Had I been present, I would have voted "aye" on Senate Joint
Resolution 3.

KUHN of Floyd

I was necessarily absent from the House chamber on April 23, 2001.
Had I been present, I would have voted "aye" on Senate Files 466 and
470.

RAECKER of Polk

BILL ENROLLED, SIGNED AND SENT TO GOVERNOR

The Chief Clerk of the House submitted the following report:

Mr. Speaker: The Chief Clerk of the House respectfully reports that the following bill
has been examined and found correctly enrolled, signed by the Speaker of the House
and the President of the Senate, and presented to the Governor for his approval on this
23rd day of April, 2001: House File 310.

MARGARET A. THOMSON
Chief Clerk of the House

Report adopted.

BILLS SIGNED BY THE GOVERNOR

A communication was received from the Governor announcing that
on April 20, 2001, he approved and transmitted to the Secretary of
State the following bill:

House File 567, an act relating to adoption including providing for standby
adoptions and providing for a legal risk waiver in interstate adoptions.

Also: That on April 23, 2001, he approved and transmitted to the
Secretary of State the following bills:

House File 384, a bill for an act relating to the elimination of certain economic
development and job training related programs and certain duties of the department of
economic development.

House File 389, an act relating to the duties of the board of directors of a school
district, including those related to the suspension of a practitioner by the board of
directors of a school district.

House File 458, an act extending the statute of limitations period for filing a
criminal charge of incest or sexual exploitation by a counselor or therapist.

House File 655, an act relating to the establishment of a system of oversight for
adult day services.

House File 663, an act repealing the ban on persons or spouses of persons who
receive direct or indirect compensation from or who have certain privileges in a county
public hospital, from serving as a trustee for that county public hospital.

House File 686, an act relating to provision of notice prior to the provision of
products or services by state agencies or political subdivisions.

Senate File 433, an act relating to certain programs and public health issues under
the purview of the Iowa department of public health, and providing a penalty.

Senate File 449, an act exempting property owned and operated by an Indian
housing authority from property tax and including an effective date.

Senate File 462, an act relating to the energy loan fund administered by the
department of natural resources.

PRESENTATION OF VISITORS

The Speaker announced that the following visitors were present in
the House chamber:

Thirty-six sixth grade students from Elk Horn-Kimballton, Elk
Horn, accompanied by Geralyn Christensen. By Drake of
Pottawattamie.

CERTIFICATES OF RECOGNITION

MR. SPEAKER: The Chief Clerk of the House respectfully reports
that certificates of recognition have been issued as follows.

MARGARET A. THOMSON
Chief Clerk of the House

2001\940 Ruby and Jim Howar, Keswick - For celebrating their 50th wedding
anniversary.

2001\941 Colletta Jane Auen, Lake View - For being a Fifty Year Pharmacist.

2001\942 John I. Ballensky, Sigourney - For being a Fifty Year Pharmacist.

2001\943 Glen H. Beaman, Iowa Falls - For being a Fifty Year Pharmacist.

2001\944 Lloyd W. Calton, Grundy Center - For being a Fifty Year Pharmacist.

2001\945 Harold J. DeLange, Grand Mound - For being a Fifty Year Pharmacist.

2001\946 Lee L. Dawson, Wilton - For being a Fifty Year Pharmacist.

2001\947 Donald B. Johnson, Cherokee - For being a Fifty Year Pharmacist.

2001\948 Carl K. Knight, Cedar Rapids - For being a Fifty Year Pharmacist.

2001\949 Wayne L. Masters, Sioux City - For being a Fifty Year Pharmacist.

2001\950 James P. Murray, Milford - For being a Fifty Year Pharmacist.

2001\951 Robert J. Nedrow, Sac City - For being a Fifty Year Pharmacist.

2001\952 Harry A. Robertson, Jr., Ottumwa - For being a Fifty Year Pharmacist.

2001\953 Robert L. Reed, Tabor - For being a Fifty Year Pharmacist.

2001\954 Walter E. Schiel, Jr., Manchester - For being a Fifty Year Pharmacist.

2001\955 Donald J. Steffensen, Des Moines - For being a Fifty Year Pharmacist.

2001\956 Patricia A. Whitsell, Iowa Falls - For being a Fifty Year Pharmacist.

2001\957 Mary Young, Indianola - For celebrating her 80th birthday.

2001\958 C.D. Spears, Indianola - For celebrating his 90th birthday.

2001\959 Emily Cahoon, Girl Scout Troop 220 - For attaining the Girl Scout Gold
Award, the highest award in Girl Scouting.

2001\960 Emily Carlson, Girl Scout Troop 220 - For attaining the Girl Scout
Gold Award, the highest award in Girl Scouting.

2001\961 Abigail Lincoln, Girl Scout Troop 220 - For attaining the Girl Scout
Gold Award, the highest award in Girl Scouting.

2001\962 Abby Nelson, Girl Scout Troop 220 - For attaining the Girl Scout Gold
Award, the highest award in Girl Scouting.

2001\963 Tiffany Pettit, Girl Scout Troop 220 - For attaining the Girl Scout Gold
Award, the highest award in Girl Scouting.

2001\964 Danielle Weipert, Girl Scout Troop 220 - For attaining the Girl Scout
Gold Award, the highest award in Girl Scouting.

2001\965 Mary Ellen Gatens, Iowa City - For 25,000 hours of volunteer service
to Veterans Affairs Medical Center.

2001\966 Bob Mundt, Council Bluffs - For being named Executive of the Year by
the Iowa Chamber of Commerce Executives.

2001\967 Phyllis and Donald Nissen, Maquoketa - For celebrating their 50th
wedding anniversary.

2001\968 Page County - For celebrating its 150th anniversary.

2001\969 Page County 4-H - For celebrating its 100th anniversary.

2001\970 Mildred Donaldson, Sharpsburg - For celebrating her 91st birthday.

2001\971 Sylvia Beck, Lenox - For celebrating her 99th birthday.

2001\972 Glenn and Doris Kernen, Bedford - For celebrating their 60th wedding
anniversary.

2001\973 Nicholas Peck, Wellman - For receiving the American Red Cross
National Lifesaving Award of Merit.

2001\974 Barry Christner, Kalona - For receiving the American Red Cross
National Lifesaving Award of Merit.

2001\975 Abby Greiner, Wellman - For receiving the American Red Cross
National Lifesaving Award of Merit.

2001\976 Doug Corbett, Dubuque - For placing 1st in the State Physics Olympics
Bridge Contest.

2001\977 Brendan Dunn, Dubuque - For placing 1st in the State Physics
Olympics Bridge Contest.

2001\978 David Kelly, Dubuque - For placing 2nd in the State Physics Olympics
Bridge Contest.

2001\979 Ben Anderegg, Dubuque - For placing 2nd in the State Physics
Olympics Bridge Contest.

2001\980 Paul Gahan, Danbury - For celebrating his 85th birthday.

2001\981 Alice and Ambrose Snyder, Arthur - For celebrating their 65th wedding
anniversary.

2001\982 Mr. and Mrs. William Willroth, Denison - For celebrating their 71st
wedding anniversary.

2001\983 Joan and Richard Madsen, Turin - For celebrating their 50th wedding
anniversary.

2001\984 Mr. and Mrs. Musfeldt, Westside - For celebrating their 50th wedding
anniversary.

2001\985 Mary and Milo Stanislav, Little Sioux - For celebrating their 50th
wedding anniversary.

2001\986 Eve Nobiling, Manilla - For celebrating her 85th birthday.

2001\987 Edna Campbell, Onawa - For celebrating her 96th birthday.

2001\988 Justin Montgomery, Kalona - For "Outstanding Performer in Original
Oratory" at the IHSSA State Individual events contest.

2001\989 Veryle and Darlene McLaughlin, Mason City - For celebrating their
50th wedding anniversary.

SUBCOMMITTEE ASSIGNMENTS

Senate File 532

Appropriations: Brunkhorst, Chair; Heaton and Warnstadt.

Senate File 533

Appropriations: Brunkhorst, Chair; Heaton and Warnstadt.

COMMITTEE RECOMMENDATIONS

MR. SPEAKER: The Chief Clerk of the House respectfully reports
that the following committee recommendations have been received
and are on file in the office of the Chief Clerk.

MARGARET A. THOMSON
Chief Clerk of the House

COMMITTEE ON APPROPRIATIONS

Senate File 527, a bill for an act relating to and making appropriations to the
judicial branch.

Fiscal Note is not required.

Recommended Do Pass April 23, 2001.

Senate File 528, a bill for an act relating to and making transportation and other
infrastructure-related appropriations to the state department of transportation,
including allocation and use of moneys from the general fund of the state, road use tax
fund, and primary road fund, providing for the nonreversion of certain moneys, and
discontinuing driver's license renewal by mail.

Fiscal Note is not required.

Recommended Do Pass April 23, 2001.

Senate File 531, a bill for an act relating to and making appropriations to certain
state departments, agencies, funds, and certain other entities, providing for regulatory
authority, and other properly related matters.

Fiscal Note is not required.

Recommended Do Pass April 23, 2001.

RESOLUTION FILED

HR 39, by Greimann, Bell, T. Taylor, Jenkins, Finch, Boal, Jochum,
D. Taylor, Gipp, Raecker, Winckler, Atteberry, Osterhaus, Seng,
Bukta, Mascher, Petersen, Falck, and Hatch, a resolution recognizing
Iowa State University graduates Marcus Fizer and Fred Hoiberg for
serving as "Literacy Champions".

Laid over under Rule 25.

AMENDMENTS FILED

H-1626 H.F. 698 Chiodo of Polk
H-1627 H.F. 726 Ford of Polk
Dotzler of Black Hawk Reynolds of Van Buren
Smith of Marshall Atteberry of Delaware
Osterhaus of Jackson Foege of Linn
H-1628 H.F. 732 Murphy of Dubuque
H-1629 H.F. 732 Osterhaus of Jackson
H-1630 H.F. 732 Greimann of Story
H-1632 H.F. 716 Shoultz of Black Hawk
H-1633 H.F. 716 Shoultz of Black Hawk
H-1634 H.F. 716 Shoultz of Black Hawk
H-1635 H.F. 732 Murphy of Dubuque
H-1636 H.F. 721 Shoultz of Black Hawk
H-1637 H.F. 726 Ford of Polk
H-1638 H.F. 726 Seng of Scott
Atteberry of Delaware
Ford of Polk
Shoultz of Black Hawk
Murphy of Dubuque
H-1639 H.F. 727 Carroll of Poweshiek
Huser of Polk
H-1640 H.F. 732 Foege of Linn
Wise of Lee
H-1641 H.F. 725 Ford of Polk
H-1642 H.F. 725 Frevert of Palo Alto
H-1643 H.F. 732 Murphy of Dubuque
H-1644 S.F. 203 Heaton of Henry
H-1645 H.F. 728 Heaton of Henry
H-1646 H.F. 726 Smith of Marshall
Atteberry of Delaware Bell of Jasper
Bukta of Clinton Chiodo of Polk
Cohoon of Des Moines Connors of Polk
Dotzler of Black Hawk Falck of Fayette
Foege of Linn Ford of Polk
Frevert of Palo Alto Greimann of Story
Hatch of Polk Jochum of Dubuque
Kreiman of Davis Kuhn of Floyd
Larkin of Lee Lensing of Johnson
Mascher of Johnson May of Worth
Mertz of Kossuth Murphy of Dubuque
Myers of Johnson O'Brien of Boone

Osterhaus of Jackson Petersen of Polk
Quirk of Chickasaw Reynolds of Van Buren
Richardson of Warren Scherrman of Dubuque
Schrader of Marion Seng of Scott
Shoultz of Black Hawk Stevens of Dickinson
D. Taylor of Linn T. Taylor of Linn
Tremmel of Wapello Warnstadt of Woodbury
Winckler of Scott Wise of Lee
H-1647 H.F. 725 May of Worth
Greimann of Story
Shoultz of Black Hawk
H-1648 H.F. 726 T. Taylor of Linn
H-1649 H.F. 732 Smith of Marshall

On motion by Rants of Woodbury the House adjourned at 5:42
p.m., until 8:45 a.m., Tuesday, April 24, 2001.

Previous Day: Friday, April 20	Next Day: Tuesday, April 24
Senate Journal: Index	House Journal: Index
Legislation: Index	Bill History: Index

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