BUSINESS, BANKING AND INSURANCE

SENATE FILE 2119 - Bank Collateral Pledged to Secure Public Funds Deposits
SENATE FILE 2183 - Long-Term Care Asset Disregard Incentive Program - VETOED BY THE GOVERNOR
SENATE FILE 2189 - Real Estate Commission Enforcement Authority
SENATE FILE 2253 - Motor Vehicle Ownership Transfers - Damage Disclosure Requirements
SENATE FILE 2257 - Use of Credit Information - Personal Insurance
SENATE FILE 2274 - Revised Iowa Nonprofit Corporation Act
HOUSE FILE 2230 - Safe Deposit Box Access by Trustees
HOUSE FILE 2269 - Regulation of Business Entities
HOUSE FILE 2270 - Cooperative Associations and Retention of Abandoned Property - Notice Requirements
HOUSE FILE 2306 - Electronic Gift Cards - Fees for Delayed Redemption
HOUSE FILE 2347 - Uniform Limited Partnership Act
HOUSE FILE 2373 - Regulation of Real Estate Auctions and Auctioneers
HOUSE FILE 2484 - Regulation of Financial Institutions and Real Property Transactions
HOUSE FILE 2489 - Regulation of Insurance and Cemetery and Funeral Merchandise and Services
HOUSE FILE 2490 - Uniform Electronic Transactions Act - Miscellaneous Changes
HOUSE FILE 2505 - Sale of Alcoholic Beverages, Wine, or Beer on Credit - Convention, Civic, or Events Centers
HOUSE FILE 2554 - Prescription Drug Assistance Program - VETOED BY THE GOVERNOR
HOUSE FILE 2557 - Securities Regulation
HOUSE FILE 2568 - Health Insurance - Miscellaneous Changes

RELATED LEGISLATION

SENATE FILE 2070 - Motor Vehicle Regulations and State Transportation Department Duties and Activities

SEE TRANSPORTATION. This Act amends current law relating to the perfection, recording and release of security interests in motor vehicles, and includes modifications to allow for the use of electronic transactions.

SENATE FILE 2173 - Private Sector Employee Drug Testing

SEE LABOR & EMPLOYMENT. This Act concerns private sector drug testing, primarily relating to authorized testing samples, confirmed positive test result requirements, and oral fluid testing procedures. The Act takes effect April 16, 2004.

SENATE FILE 2209 - Immunizations - Mercury Content - Reimbursement

SEE HEALTH & SAFETY. This Act prohibits early childhood immunizations administered in Iowa beginning January 1, 2006, with some exceptions, from containing more than trace amounts of mercury. The Act also requires third-party payment provider contracts or policies delivered, issued for delivery, continued, or renewed in Iowa on or after January 1, 2006, to provide reimbursement for immunizations containing no more than trace amounts of mercury at the acquisition cost rate.

SENATE FILE 2290 - Economic Development Incentives - New Jobs and Income, New Capital Investment, and Enterprise Zone Programs

SEE ECONOMIC DEVELOPMENT. This Act relates to economic development incentives under the New Jobs and Income Program, the New Capital Investment Program, and the Enterprise Zone Program. The Act takes effect March 17, 2004.

SENATE FILE 2296 - Administration of Tax Policy and Related Internal Revenue Code Revisions

SEE TAXATION. This Act amends various provisions of state tax laws by updating references to the federal research activities credit, excluding trade discounts from gross receipts for sales and use tax purposes, expanding the exemption from sales and use taxes for molding and sand handling equipment, and placing restrictions on cigarette samples given to the public.

SENATE FILE 2298 - Government Funding, Administration, and Regulation - Appropriations and Miscellaneous Changes

SEE APPROPRIATIONS. Division XV of this Act exempts from the state sales and use taxes the lease or rental of certain building and construction machinery and equipment and specifies that the sales of such items are not exempt when purchased for resale other than those purchased for lease or rental. Division XVI extends the due date for the prepayment of insurance premiums taxes, changes the effective date for the newly enacted provision requiring an owner-operated mechanism to prevent the operation of electrical and mechanical amusement devices at locations with only a beer permit, and changes the applicability date of a newly enacted Code section relating to the use of credit information for personal insurance purposes. Division XX provides a wind energy production tax credit based upon the amount of electricity sold which is produced by an electrical production facility that uses wind to produce the electricity. The tax credit may be used to offset the tax liability under the individual or corporate income tax, franchise tax, or insurance premiums tax.

HOUSE FILE 2170 - Product Liability Actions

SEE CIVIL LAW, PROCEDURE & COURT ADMINISTRATION. This Act relates to product liability actions.

HOUSE FILE 2207 - Substantive Code Corrections

SEE STATE GOVERNMENT. This Act contains statutory corrections that adjust language to reflect current practices, insert earlier omissions, delete redundancies and inaccuracies, delete temporary language, resolve inconsistencies and conflicts, update ongoing provisions, or remove ambiguities. Changes made include changes relating to insurance producers; the Money Services Act; agricultural products under the Life Science Products Code chapter; obsolete references concerning the Microenterprise Development Revolving Fund, the Iowa Technology Center, and a job training program study; public utilities; regulation of various business entities; health maintenance organization annual reports; the plan to assure fair access to insurance requirements; forcible entry and detainer actions; and repeals of certain economic development initiatives established in 2003. The changes to the future repeals of certain economic development initiatives take effect April 26, 2004.

HOUSE FILE 2262 - Public Employee Retirement Systems and Other Benefits - Miscellaneous Changes

SEE STATE GOVERNMENT. This Act authorizes a payroll deduction by state employees to purchase additional insurance coverage. The Act specifies that at least 500 state employees request the deduction and provides that the insurance coverage purchased not be otherwise provided by the state.

HOUSE FILE 2553 - Iowa Educational Savings Plan Trust Revisions

SEE TAXATION. This Act makes several technical and substantive changes regarding operation of the Iowa Educational Savings Plan Trust pursuant to Code Chapter 12D. The Act takes effect April 15, 2004.

HOUSE FILE 2561 - Job Corps Center New Jobs Tax Credit - VETOED BY THE GOVERNOR

SEE ECONOMIC DEVELOPMENT. This bill would have created a Job Corps Center New Jobs Tax Credit to be used against personal or corporate income tax liability.

HOUSE FILE 2581 - Miscellaneous Economic Development, Taxation, Regulatory, and Employment-Related Changes — EXTRAORDINARY SESSION

SEE ECONOMIC DEVELOPMENT. Division V of the Act reaffirms and reenacts requirements involving the delinquency charges collectible relative to certain consumer credit transactions and authority to contract for debt payment under credit transactions other than consumer credit transactions. Division IX of the Act makes additions to the individual and corporate income taxes to couple with the changes made in federal legislation that increases the allowance for expensing certain deprecial assets and that allows a federal bonus depreciation of 50 percent for property acquired after May 5, 2003, and before January 1, 2005. The coupling with the increase in expensing allowance is retroactively applicable to tax years beginning on or after January 1, 2003. The coupling with the 50 percent bonus depreciation applies retroactively to tax years ending after May 5, 2003. The Act takes effect September 7, 2004.

BUSINESS, BANKING AND INSURANCE

SENATE FILE 2119 - Bank Collateral Pledged to Secure Public Funds Deposits (full text of bill)

BY COMMITTEE ON COMMERCE. This Act amends provisions in Code Chapter 12C, which, in part, require that financial institutions, and in particular banks, pledge certain types and amounts of collateral with the Treasurer of State in order to secure the deposit of public moneys.

As part of its rulemaking duties under the chapter, the Treasurer of State must establish procedures which allow a bank to substitute different collateral for the collateral that was originally pledged. The Act also requires the Treasurer of State to adopt rules that establish procedures to allow a bank to add or release pledged collateral.

If the assets of the closed bank are insufficient to cover losses incurred by public funds depositors, payments must be made from the State Sinking Fund for public deposits in banks as created in Code Section 12C.25. If that fund is inadequate to compensate public funds depositors, the Treasurer of State must make an assessment against other banks whose public funds deposits exceed federal deposit insurance coverage. The Act eliminates a requirement that a security interest in the collateral is granted as security for the obligation of a bank to pay the amount of that assessment.

The Act takes effect April 16, 2004.

SENATE FILE 2183 - Long-Term Care Asset Disregard Incentive Program - VETOED BY THE GOVERNOR (full text of bill)

BY COMMITTEE ON COMMERCE. This bill would have established an Iowa Long-Term Care Asset Disregard Incentive Program administered by the Department of Human Services and the Insurance Division of the Department of Commerce.

SENATE FILE 2189 - Real Estate Commission Enforcement Authority (full text of bill)

BY COMMITTEE ON COMMERCE. This Act confers additional enforcement authority upon the Real Estate Commission. The Act provides that if an investigation conducted by the commission reveals that an unlicensed person has assumed to act in the capacity of a real estate broker or real estate salesperson, other than a person whose actions are exempt pursuant to Code Chapter 543B, Real Estate Brokers and Salespersons, the commission may issue a cease and desist order, and may impose a civil penalty of up to the greater of $10,000 or 10 percent of the real estate sale price.

The Act also provides that an injunction may be granted through an action in district court to prohibit a person from engaging in an activity which violates the provisions of Code Section 543B.1, which provide that a person shall not, directly or indirectly, with the intention or upon the promise of receiving any valuable consideration, offer, attempt, agree to perform, or perform any single act as a real estate broker whether as a part of a transaction or as an entire transaction, or represent oneself as a real estate broker, broker associate, or salesperson, without first obtaining a license and otherwise complying with the requirements of Code Chapter 543B. The action for injunctive relief may be brought by an affected person, which the Act defines to mean any person directly impacted by the actions of a person suspected of violating the provisions of Code Section 543B.1, including but not limited to the Real Estate Commission, a person who has utilized the services of a person suspected of violating the provisions of the Code section, or a private association composed primarily of members practicing a profession for which licensure pursuant to Code Chapter 543B is required.

If successful in obtaining injunctive relief, the affected person shall be entitled to actual costs and attorney fees, unless the person suspected of the violation prevails in an application for permanent injunctive relief. The Act defines "actual costs" as those costs other than attorney fees which were actually incurred in connection with the violation, including but not limited to court and witness fees, investigative expenses, travel expenses, legal research expenses, and other related fees and expenses.

SENATE FILE 2253 - Motor Vehicle Ownership Transfers - Damage Disclosure Requirements (full text of bill)

BY COMMITTEE ON TRANSPORTATION. This Act revises damage disclosure requirements for the transfer of ownership of a motor vehicle. The Act requires that a transferor must disclose if the vehicle was damaged to the extent that it was a wrecked or salvage vehicle, which is defined as damage for which the retail cost of repair exceeds 50 percent of the fair market value of the vehicle before it was damaged. The current standard for damage disclosure is damage resulting from a single accident for which the cost of repair was $6,000 or more. The current requirement that a damage disclosure statement indicate whether the transferor knows if the vehicle was ever titled as a salvage or flood vehicle is amended to include rebuilt titles. Similar disclosure requirements apply to nonresident transferors and lessees, as appropriate.

The Act provides that vehicles more than seven model years old, rather than nine model years under current law, are exempt from damage disclosure requirements other than airbag disclosure requirements.

The Act makes a corrective amendment to specify that disclosure requirements relating to nonoperative or missing airbags and associated penalties apply for all motor vehicles.

SENATE FILE 2257 - Use of Credit Information - Personal Insurance (full text of bill)

BY COMMITTEE ON COMMERCE. This Act, which is based on model legislation, relates to the use of credit information for the purpose of underwriting or rating risks for a policy of personal insurance. The Act applies to personal insurance that is individually underwritten for personal, family, farm, or household use, and is limited to private passenger automobile, homeowners, farm owners, personal farm liability, motorcycle, mobile home owners, noncommercial dwelling fire insurance, boat, personal watercraft, snowmobile, and recreational vehicle policies.

The Act defines "credit information," "credit report," "insurance score," and related terms for purposes of the Act.

The Act prohibits an insurer that uses credit information from using an insurance score that is calculated based on the income, gender, address, zip code, ethnic group, religion, marital status, race, or nationality of a consumer. The Act also prohibits an insurer from denying issuance, canceling, refusing to renew, basing renewal rates, or taking any other adverse action against a consumer solely on the basis of credit information; from considering a consumer's lack of credit information or the inability to calculate an insurance score unless such consideration is treated as neutral credit information or credit information is not used as an underwriting factor; from using credit information that is not current or has not been updated as required by the Act; and from calculating an insurance score by considering certain information as a negative credit factor such as credit inquiries not initiated by the consumer or initiated by the consumer for personal use, inquiries relating to insurance coverage, collection accounts for medical services, and multiple inquiries by lenders relating to a home mortgage or automobile loan that are made within 30 days of one another.

The Act provides for dispute resolution in accordance with the federal Fair Credit Reporting Act and correction of errors resulting from incorrect or incomplete credit information.

The Act requires insurers to do the following:

• Disclose to and notify consumers that the insurer may obtain credit information of the consumer in connection with an application for insurance.
• "Notify consumers of adverse action taken, in accordance with the requirements of the federal Fair Credit Reporting Act, by giving clear and specific reasons that include a description of up to four factors that were the primary influence for the adverse action taken.
• File certain credit scoring information with the Insurance Commissioner, if the insurer uses credit information in underwriting or rating a consumer. Such information filed is considered confidential and is protected as a trade secret under Code Section 22.7.
• Indemnify, defend, and hold harmless agents and producers of the insurer for any liability, fees and costs that arise out of the use of credit information or insurance scores on behalf of the insurer, so long as such use is done in compliance with the instructions or procedures of the insurer and with any applicable law or regulation.

The Act prohibits a consumer reporting agency from providing or selling information obtained or submitted in conjunction with an insurance inquiry about the credit information, credit report, or insurance score of a consumer. The provisions of the Act are severable if any of them are later declared invalid.

The Act takes effect July 1, 2004, and applies to insurance contracts or policies delivered, issued for delivery, continued, or renewed in this state on or after April 1, 2005. Division XVI of S.F. 2298 (see Appropriations) changes the applicability date from April 1, 2005, to October 1, 2004, as it relates to the use of credit information for personal insurance purposes.

SENATE FILE 2274 - Revised Iowa Nonprofit Corporation Act (full text of bill)

BY COMMITTEE ON JUDICIARY. This Act repeals Code Sections 504A.1 through 504A.102, relating to nonprofit corporations, and replaces them with the Revised Model Nonprofit Corporation Act in Code Chapter 504.

GENERAL PROVISIONS. Subchapter I provides for filing requirements, forms furnished by the Secretary of State, filing, service, and copying fees, effective dates and correction of filed documents, evidentiary effect of copies, certificates of existence, penalties for signing a false document, powers and duties of the Secretary of State, notice requirements, and judicial relief.

ORGANIZATION. Subchapter II provides for incorporation and organization of nonprofit corporations.

PURPOSES AND POWERS. Subchapter III provides for general and emergency powers of nonprofit corporations and ultra vires.

NAMES. Subchapter IV provides for corporate names, reserved names, and registered names of nonprofit corporations.

OFFICES AND AGENTS. Subchapter V provides for registered offices and agents of nonprofit corporations.

MEMBERS AND MEMBERSHIPS. Subchapter VI provides for members and memberships in nonprofit corporations.

MEETINGS AND VOTING. Subchapter VII provides for members' meetings and voting requirements.

DIRECTORS AND OFFICERS. Subchapter VIII relates to directors and officers of nonprofit corporations.

PERSONAL LIABILITY. Subchapter IX relates to personal liability and limitations on the personal liability of directors, officers, members, or volunteers of nonprofit corporations.

AMENDMENT OF ARTICLES AND BYLAWS. Subchapter X relates to articles of incorporation and bylaws of nonprofit corporations.

MERGER. Subchapter XI relates to mergers by nonprofit corporations.

SALE OF ASSETS. Subchapter XII provides for sale of assets by nonprofit corporations.

DISTRIBUTIONS. Subchapter XIII relates to prohibited and authorized distributions by nonprofit corporations.

DISSOLUTION. Subchapter XIV provides for voluntary, administrative and judicial dissolution of nonprofit corporations.

FOREIGN CORPORATIONS. Subchapter XV relates to the authority of foreign nonprofit corporations to transact business in the state.

RECORDS AND REPORTS. Subchapter XVI relates to corporate records and reports of nonprofit corporations.

TRANSITION PROVISIONS. Subchapter XVII provides for the application of new Code Chapter 504 to existing corporations and qualified foreign corporations, savings provisions, severability, and the designation of all domestic nonprofit corporations as public benefit, mutual benefit, or religious corporations.

Code Section 504A.102, relating to farm aid associations, is amended to provide that any liabilities or rights of a farm aid association that exist prior to the association's election to be governed as a corporation under Code Chapter 504A before January 1, 2005, or under Code Chapter 504 on or after January 1, 2005, but prior to June 30, 2005, continue after the July 1, 2005, repeal of other transition provisions relating to farm aid associations.

EFFECTIVE DATES. The Act takes effect July 1, 2004, and is applicable to new nonprofit corporations incorporated after January 1, 2005. Nonprofit corporations incorporated under Code Chapter 504A are subject to new Code Chapter 504, the revised Iowa Nonprofit Corporation Act created in the Act, beginning on July 1, 2005. All corporations that are or become subject to this Act on July 1, 2005, must be designated as public benefit, mutual benefit, or religious corporations by July 1, 2005. Code Chapter 504A, the current Iowa Nonprofit Corporation Act, is repealed on July 1, 2005.

HOUSE FILE 2230 - Safe Deposit Box Access by Trustees (full text of bill)

BY COMMITTEE ON JUDICIARY. This Act relates to safe deposit box access by a trustee of a trust created by the deceased owner or lessee of the safe deposit box. The Act allows the trustee to present a certification of trust to a bank or a credit union to gain access to the contents of a deceased owner's or lessee's safe deposit box. The certification must contain a statement that the trust has not been revoked, modified or amended in any manner which would cause the representations contained in the certification to be incorrect and must contain a statement that it is being signed by all of the currently acting trustees of the trust and is sworn and subscribed to under penalty of perjury before a notary public.

HOUSE FILE 2269 - Regulation of Business Entities (full text of bill)

BY COMMITTEE ON COMMERCE, REGULATION AND LABOR. This Act regulates a number of business entities traditionally under the jurisdiction of the Insurance Division of the Department of Commerce. The Act provides for the regulation of cemetery and funeral merchandising and services, business promotions and contracts, and businesses providing continuing care or adult congregate living services.

Division I - Cemetery and Funeral Merchandising and Services

Division I amends provisions in Code Chapter 523A, the "Iowa Cemetery and Funeral Merchandise and Funeral Services Act," which regulates persons engaged in the business of selling merchandise and services related to interment, entombment or cremation. The chapter is administered by the Insurance Commissioner.

The division eliminates the definition of "person," which is defined for purposes of the entire Code in Code Section 4.1.

Code Sections 523A.501 through 523A.503 provide permit requirements for persons regulated by the Code chapter, such as establishments or persons advertising or selling cemetery or funeral merchandise or funeral services. Specifically, the Code chapter provides for both establishment permits and sales permits. The division amends Code Section 523A.501 regulating establishment permits by eliminating a requirement that an establishment permit disclose information about the permit holder's employer or business. The division also amends provisions in Code Section 523A.502 regulating sales permits. A provision in the Code section requires a purchaser of an establishment to obtain a new sales permit within 30 days from a sale. The division requires the establishment selling its business to cancel its sales permit.

Division II - Business Promotions and Contracts

Division II amends a number of provisions in Code Chapter 523B regulating business opportunity promotions. It removes references to the Insurance Division and administrator (the Insurance Commissioner or the commissioner's deputy) as the agency responsible for the chapter's enforcement. As part of this change, the division eliminates registration and filing requirements but retains disclosure requirements, including references to administrative files and opinions. It rewrites provisions providing for consent to service of process which, under the division, is filed with the Secretary of State rather than the Insurance Division.

The division eliminates a number of provisions, including Code Section 523B.8, relating to the powers of the administrator to carry out the provisions of the chapter, and Code Section 523B.10, which authorizes the administrator to adopt rules.

A person who violates a provision of the Code chapter is subject to a number of penalties, including a class "D" felony.

Division III - Congregate Care or Senior Adult Congregate Living Services

Division III amends Code Chapter 523D providing for the regulation of places that undertake to provide continuing care or senior adult congregate living services to an individual if such facility provides contractual support services, such as laundry, maintenance, housekeeping, emergency nursing care, activity services, security, dining options, transportation, beauty and barber services, health care, personal care, or supervised medication administration. A provider of such services who charges an entrance fee to a person as a resident, prospective resident, or a personal representative is required to file a disclosure statement with the Insurance Commissioner which in some ways resembles a stock prospective. The provider must also submit an application to the commissioner as well as a filing fee of $100. The Code chapter details the content of the required disclosure statements, provides enforcement mechanisms, and provides penalties.

The division eliminates the requirement that the annual disclosure statement and the application must be filed and approved by the commissioner. Instead, the provider must submit an annual certification of compliance to the commissioner.

The division requires that the disclosure statement include new information, including a description of transactions in which the provider obtains real or personal property or construction services from a developer or other person who does not have an arm's-length relationship with the provider.

The division provides that the Insurance Commissioner, and not the Attorney General, may petition the district court for an injunction to restrain a person who is violating the Code chapter. The division provides that a person who violates a provision of the Code chapter is guilty of a fraudulent practice as provided in Code Chapter 714. Currently, a person who violates a provision of the Code chapter is guilty of an aggravated misdemeanor.

HOUSE FILE 2270 - Cooperative Associations and Retention of Abandoned Property - Notice Requirements (full text of bill)

BY COMMITTEE ON COMMERCE, REGULATION AND LABOR. This Act requires a cooperative association to publish a notice regarding the retention of a person's abandoned disbursement property, such as stock or other equity, by the cooperative association where the amount of abandoned property is equal to or greater than $50. Current law requires a notice to be published regardless of the value of the abandoned property.

HOUSE FILE 2306 - Electronic Gift Cards - Fees for Delayed Redemption (full text of bill)

BY COMMITTEE ON COMMERCE, REGULATION AND LABOR. This Act provides that an issuer of an electronic gift card shall not deduct from the gift card any charge for failure to present the gift card in a timely manner unless a valid and enforceable contract exists to impose such a charge and the issuer regularly imposes such charges and does not regularly reverse or cancel such charges.

HOUSE FILE 2347 - Uniform Limited Partnership Act (full text of bill)

BY COMMITTEE ON JUDICIARY. This Act is based on an updated version of the Uniform Limited Partnership Act, approved by the National Conference of Commissioners on Uniform State Laws in 2002. The Act creates a new Code Chapter 488 to replace Code Chapter 487. The language of the model Act has been altered to be consistent with other Iowa statutes, and certain provisions have been changed to be consistent with other business laws in Iowa.

Brief Description of Articles

Article 1 provides a number of general sections, including the chapter's short title, definitions, the nature, purposes and powers of a limited partnership, how state law applies to the chapter, naming requirements, the effect of the partnership agreement upon the partners, procedures for service of process, and consent needed by and proxies acting on behalf of the partners.

Article 2 provides for the formation and termination of limited partnership and for the submission of reports to the Secretary of State.

Article 3 provides for the rights, duties and liabilities of limited partnerships.

Article 4 provides for general partners, including establishing standards of conduct and liability and provides for rights of action.

Article 5 provides for contributions and distributions, the form of contributions, and rights to and limitations on distributions.

Article 6 provides for dissociation, the effect of dissociation as a limited partner or general partner, and liability.

Article 7 provides for the transfer of interests and rights, including the rights of transferees, creditors, or estates of deceased partners.

Article 8 provides for dissolution, including nonjudicial or judicial dissolution; winding up; the settlement of claims; and administrative dissolution, reinstatement, and appeal.

Article 9 provides for foreign limited partnerships, including providing for a certificate of authority, administrative remedies, and naming requirements.

Article 10 provides for actions by partners, including derivative actions and procedures for instituting legal actions.

Article 11 provides for conversion and merger, including by requiring a plan of conversion or a plan of merger, the effect of conversion or merger, and liability following conversion or merger.

Article 12 provides for miscellaneous provisions, including statutory rules for application and construction of the chapter's provisions, an effective date, and a savings clause.

Summary of the Law Governing Limited Partnerships

Under the Act, a limited partnership may be established for any lawful purpose; may exist for a perpetual duration or as provided in the partnership agreement; may use names of the limited partners in the name of the partnership; and must file a biennial report with the Secretary of State. Recordkeeping for all forms required under the chapter is centralized in the Secretary of State's Office. The Act provides for a schedule of fees and allows the Secretary of State to specify the acceptable format for filing.

Under the Act, a limited partner has no liability for the debts of the entity, even if the limited partner participates in the management and control of the limited partnership. A limited partner is obligated to exercise rights consistent with good faith and fair dealing, but has no fiduciary duties solely by reason of being a limited partner. A limited partner may access certain information about the partnership without a showing of good cause, but the partnership agreement may set reasonable restrictions on access to and use of required information. For other information, the limited partner must make a reasonable demand for access. The Act also sets forth duties for the general partners, provides methods for distributions according to contributions made, and establishes powers and liabilities related to dissociation of partners. Specific procedures exist for transferring economic rights, winding up business, dealing with creditors, and organizational mergers and conversions.

The Act establishes a serious misdemeanor penalty for persons who sign a record required or authorized to be filed under Code Chapter 488 that the signer knows to be false. A serious misdemeanor is punishable by a fine of at least $250 but not more than $1,500 and may also include confinement for no more than one year. However, the Act limits the penalty to a fine of no more than $1,000. The new Code chapter is effective January 1, 2005, and applies to limited partnerships formed at or before that time that elect to be covered by the law. After January 1, 2006, the law applies to all limited partnerships, with certain exceptions for limited partnerships formed prior to January 1, 2005.

The Act takes effect January 1, 2005.

HOUSE FILE 2373 - Regulation of Real Estate Auctions and Auctioneers (full text of bill)

BY COMMITTEE ON COMMERCE, REGULATION AND LABOR. This Act relates to the authorized activities of auctioneers in conducting a public sale or auction involving the sale or transfer of real property. The Act provides that an auctioneer shall provide in any advertising the name and address of the real estate broker or attorney who is providing brokerage services for the transaction and who is responsible for closing the sale, that the real estate broker or attorney shall be present at the time of the auction, and that a real estate broker or attorney who violates this provision shall be subject to a civil penalty of $2,500. The Act additionally provides that if an investigation reveals that an auctioneer has violated the exemption provisions, or has assumed to act in the capacity of a real estate broker or salesperson, the Real Estate Commission may issue a cease and desist order, and shall issue a warning letter notifying the auctioneer of the violation for a first offense. The Act provides that subsequent violations shall result in the Real Estate Commission imposing a penalty of up to the greater of $10,000 or 10 percent of the real estate sales price for each violation.

HOUSE FILE 2484 - Regulation of Financial Institutions and Real Property Transactions (full text of bill)

BY COMMITTEE ON COMMERCE, REGULATION AND LABOR. This Act relates to the regulation of financial and real property institutions and assets.

Division I - Division of Banking

Division I of the Act implements reorganization of the Division of Banking of the Department of Commerce by substantially eliminating the position of deputy superintendent and references thereto. The division changes the name of the State Banking Board to the State Banking Council and delineates the appointment and terms of council members. The superintendent's report to the Governor will not be distributed to each state bank. Either the banking division or a federal banking agency shall examine every state bank and trust company at least once every two years. The superintendent shall set all fees instead of the State Banking Board.

The division allows a board of directors of a bank to take action by written consent without a meeting. Certain prior approvals by the superintendent required for actions of state banks are eliminated. Certain notices published by banks are no longer required to be published at least once a week for two weeks. Proof of publication of the notice must be provided to the superintendent within 14 days. A state bank converting to a national bank or federal savings association shall not continue to use "state" in the bank's legally chartered name. The division makes other grammatical and technical changes regarding the Division of Banking and the regulation of banking.

Division II - Credit Unions

Division II of the Act provides for the amendment of a credit union's bylaws by mail or electronic ballot, and permits elections of the board of directors to be held by electronic voting. The board of directors may request permission from the Superintendent of Credit Unions to reduce the number of board members from nine to seven. The division expands the permissible investments a credit union may engage in, and permits credit unions to perform setoffs on members' accounts under specified circumstances.

The division requires the superintendent to examine each credit union no less than once every 24 months, rather than once every 18 months. The duties of a director and the board of directors are expanded to require additional review of records and internal controls. Directors, officers, and other employees of a state credit union are prohibited from participating in matters in which they have a direct or indirect interest. The division strikes the provision granting a credit union a lien over the shares and deposits of a member for any debt due the credit union by the member. The division expands the authority of a credit union to suspend or expel members or to deny service to members. The division permits a corporate central credit union to establish capital accounts.

Division III - Banks As Limited Liability Companies

Division III of the Act permits a state bank to be organized as a limited liability company. The definitions of "articles of incorporation," "shareholder," "shares," and "bylaws" are amended to include the organization of and membership interests in limited liability companies. New definitions are provided for "board of directors," "director," "manager," "member," and "membership interest" to reflect their application to state banks as limited liability companies. The division requires the articles of incorporation of a state bank organized as a limited liability company to include specific provisions. Similarly, "bylaws" may also mean the operating agreement of a state bank organized as a limited liability company. A state bank organized as a limited liability company must also comply with Code Chapter 490A, Limited Liability Companies, except that where conflicts occur, Code Chapter 524, Banks, controls. The Superintendent of Banking may adopt rules to regulate state banks that organize as limited liability companies.

The division makes numerous corresponding terminology changes throughout Code Chapter 524, and also to Code Section 422.11 regarding the franchise tax credit, to reflect that a state bank may be either a corporation or limited liability company.

Division IV - Real Property Loans

Division IV of the Act permits a state-charted financial institution to charge a borrower for any bona fide costs incurred with a loan to the extent permitted by federal law as determined by the Office of the Comptroller of the Currency of the U. S. Department of the Treasury, the National Credit Union Association, or the Office of Thrift Supervision of the U. S. Department of the Treasury. The costs shall also apply to and may be collected by an insurer authorized to do business in Iowa, but the provision does not permit the sale of title insurance in this state.

Division V - Real Property Financial Liability

Division V of the Act provides that a person holding indicia of ownership of property contaminated by a hazardous substance or waste may not be held liable for the contamination if the person did not knowingly cause a new hazardous substance or waste that injures a third party or contaminates a third party's property, or the person is not a potentially responsible party or affiliated with a potentially responsible party through a family, contractual or business relationship. The division further provides that a person holding indicia of title must provide reasonable access to the property to any potentially responsible party or authorized regulatory authority. The division does not provide immunity from criminal liability. The division takes effect May 6, 2004.

HOUSE FILE 2489 - Regulation of Insurance and Cemetery and Funeral Merchandise and Services (full text of bill)

BY COMMITTEE ON COMMERCE, REGULATION AND LABOR. This Act revises various chapters in Title XIII of the Code, including the regulation of insurance.

The Act deletes references to Code Chapters 507B and 522B, regarding unfair trade practices in insurance and the licensing of insurance producers, in Code Chapter 272C, which relates to continuing education and regulation for certain professions and occupations.

The Act modifies terminology to refer to "producer" instead of to "broker" or "agent" in Code Chapter 432, providing for an insurance company tax, and Code Chapter 507B.

The Act creates a new centralized civil penalty section in Code Section 505.7A that applies to all prohibited acts in Title XIII, subtitle 1, regarding insurance and related regulation. The civil penalty is imposed by order of the Insurance Commissioner after a hearing. Other Code sections are amended to conform with this consolidation of general penalties.

The Act makes a number of modifications to certain terminology used in the Interstate Insurance Product Regulation Compact contained in Code Chapter 505A that was enacted in 2003.

The Act amends Code Chapter 507, which provides for the examination of insurance companies. The Act amends Code Section 507.14 to provide that analysis notes, work papers, or other documents related to the analysis of an insurer are not public records under Code Chapter 22. Code Section 507A.10, relating to civil penalties and cease and desist orders for unauthorized insurers, is expanded to provide additional procedures relating to summary orders, requests for contested case proceedings, contempt orders, criminal penalties, and referral to criminal authorities.

Code Section 507B.3 is amended to allow the Insurance Commissioner to provide information from an investigation regarding insurance trade practices to a company or producer that is the subject of the complaint or to the consumer who filed the complaint without waiving confidentiality provisions.

Code Section 507B.6 is amended to allow the service of subpoenas by restricted certified mail.

A new Code Section 507B.6A is added to provide procedures for the issuance of summary cease and desist orders, requests for contested case proceedings, and the issuance of contempt orders in insurance trade practices cases.

The penalty provisions for cease and desist orders contained in Code Section 507B.1 are amended by requiring only a general standard that the person knew or reasonably should have known that the conduct violated Iowa insurance laws. In addition, the Insurance Commissioner is empowered to impose a civil penalty or suspend or revoke the person's license when the person violates a cease and desist order.

Code Chapter 507C provides for the supervision, rehabilitation and liquidation of insurance companies. The Act amends Code Section 507C.11 by providing that orders, in addition to other records and documents comprising the record of a proceeding, are confidential.

The Act amends Code Chapter 511 regulating life insurance companies and Code Chapter 515 regulating other insurance companies. Code Sections 511.8 and 515.35 are amended to provide that these companies are authorized to invest in bonds or obligations issued as backed by the United States or in open-end management investment companies whose portfolios are limited to those securities. The sections limit the percentage insurance companies or associations may invest in foreign government securities. Code Section 511.8 modifies the percentage of a company's legal reserve requirements that may be used in hedging transactions and loaning securities. Code Section 515.35 is modified regarding the loaning of securities by an insurance company.

The Act amends Code Section 513C.8 to provide that the board of directors of the Iowa Comprehensive Health Insurance Association, instead of the Insurance Commissioner but with the commissioner's approval, shall adopt forms and levels of coverage of basic and standard individual health benefit plans for the individual market.

The Act amends Code Section 513C.10 to provide that all insurers, as designated by the board and with the approval of the commissioner, shall be included as members of the Iowa Individual Health Benefit Reinsurance Association. The Act amends Code Section 513C.10 to provide that the board shall develop not only procedures but assessment mechanisms to make assessments and distributions as required to equalize individual carrier and organized delivery system gains or losses.

The Act amends provisions in Code Chapter 514A providing for accident and health insurance. It adds a new Code Section 514A.3A requiring a refund of an unearned premium prorated to the month of an insured's death.

The Act amends Code Chapter 514E relating to the Iowa Comprehensive Health Insurance Association by providing for the issuance of policies by the association's board of directors. Coverage is to be determined by the board under benefit plans adopted by the board and approved by the Insurance Commissioner, based on a percentage of average premiums. Code Section 514E.4 is amended relating to the payment of medically necessary health care services and the provision of benefits, deductibles and coinsurance reflective of current individual insurance market conditions. The association's board is authorized to make benefit changes to remain current with market conditions. Code Sections 514E.5 and 514E.6, containing lists of excluded expenses and benefit limitations, are repealed. The Act eliminates unused definitions from Code Section 514E.1, removes an outdated reference to Code Chapter 513B, and coordinates Code language with Medicare requirements in Code Section 513C.8.

The Act amends Code Section 514E.7 to rescind coverage for an individual who no longer resides in the state.

The Act amends Code Chapter 522B, regarding insurance producer license denial, nonrenewal or revocation. It increases the authority of the Insurance Commissioner to investigate and enforce provisions of the chapter.

The Act provides for new Code Section 522B.16A, which imposes duties on licensees, including a duty to keep certain records pertaining to insurance transactions undertaken by a producer available for inspection by the commissioner or the commissioner's representative, for at least three years. Licensure sanctions and civil penalties apply to a violation.

The Act modifies provisions regarding cemetery and funeral merchandise and services that relate to contestability clauses and death benefit limitations in certain policies and annuities. The Act also changes the requirements for establishment and sales permits for cemetery and funeral merchandise and services.

The Act repeals a number of Code sections in conjunction with the consolidation of general penalties and the new general penalty provision in Code Section 505.7A.

HOUSE FILE 2490 - Uniform Electronic Transactions Act - Miscellaneous Changes (full text of bill)

BY COMMITTEE ON COMMERCE, REGULATION AND LABOR. This Act makes numerous changes to Code Chapter 554D, the Uniform Electronic Transactions Act, to conform the chapter to federal standards. The Act broadens the applicability of the chapter by removing several exceptions, including the applicability of the chapter to consumer transactions and transactions governed by a rule of law governing advanced directives, guardianships, and conservatorships. The Act amends provisions regarding the delivery of records and provides for the severability of the chapter if any provision is held invalid. The Act repeals certain sections of Code Chapter 554D, including those relating to the legal recognition of electronic records affecting interests in real property, and the interoperability of the chapter with similar requirements adopted by other government agencies. The Act also repeals the criminal penalty for misrepresentation of identity or authorization to obtain a private key for use in a digital signature.

HOUSE FILE 2505 - Sale of Alcoholic Beverages, Wine, or Beer on Credit - Convention, Civic, or Events Centers (full text of bill)

BY COMMITTEE ON COMMERCE, REGULATION AND LABOR. This Act provides that Code provisions which specify that alcoholic beverages, wine, or beer may not be sold to any person on credit except with a bona fide credit card shall not apply to the managing entity of a convention center, civic center, or events center.

HOUSE FILE 2554 - Prescription Drug Assistance Program - VETOED BY THE GOVERNOR (full text of bill)

BY COMMITTEE ON APPROPRIATIONS. This bill would have directed the Commissioner of Insurance to seek federal funding to establish and administer a Prescription Drug Assistance Program. If federal funding was not received before October 1, 2004, the bill would have provided an appropriation for the establishment and administration of the program.

HOUSE FILE 2557 - Securities Regulation (full text of bill)

BY COMMITTEE ON WAYS AND MEANS. This Act provides for the regulation of securities. Generally, these regulations are designed to protect investors from fraudulent sales of securities. Securities are governed under both federal and state law, including the Securities Act of 1933 and the Securities Exchange Act of 1934, and are regulated by the U.S. Securities and Exchange Commission. Iowa has adopted the Iowa Uniform Securities Act, model legislation popularly known as the "Blue Sky Law," which was developed by the National Conference of Commissioners on Uniform State Laws. The Iowa Blue Sky Law is codified in Code Chapter 502 and administered by the Securities Bureau of the Insurance Division of the Department of Commerce.

The Act substantially revises almost every provision of Code Chapter 502. It is based on a new version of model legislation as recommended by the commissioners and referred to as the Uniform Securities Act (2002). The new uniform Act provides state securities regulators authority to investigate, prosecute and sanction individuals and firms that engage in securities transactions, in a manner that is consistent with current federal law, including with the federal National Securities Markets Improvement Act, enacted in 1996, which has preempted some state regulatory authority.

The Act regulates public offerings of securities by issuers. Broker-dealers and their agents, and investment advisers and their representatives, must be registered. The Act prohibits fraud in securities transactions and provides enforcement powers to the bureau and Attorney General. These powers include the ability to make rules and regulations, issue stop orders, bring criminal prosecutions, and pursue civil actions in court.

Division I - Substantive Provisions

Article 1 includes general provisions, including definitions, a reference to federal statutes and federal agencies, and provisions governing electronic records and signatures.

Article 2 provides exemptions from registration of securities, including by providing for both exempt securities and exempt transactions and waivers. It also provides for the denial, suspension, revocation, conditions, or limitations on exemptions for securities regulation.

Article 3 provides for the registration of securities and notice filing of federal covered securities. It provides for security registration requirements, notice filing, securities registration by coordination or qualification, security registration filings, and the denial, suspension or revocation of registrations. It also provides for waivers and modification of these requirements.

Article 3A is a special Iowa article that includes takeover provisions, including by providing for registration requirements; the filing of solicitation materials; prohibiting fraudulent, deceptive or manipulative practices; providing limitations on offers and offerors; providing for administration; and providing for the chapter's application to public utilities and financial institutions.

Article 4 regulates broker-dealers, agents, investment advisers, investment adviser representatives, and federal covered investment advisers. The article provides for registration requirements and exemptions for broker-dealers, agents, and investment adviser representatives. It also provides for federal covered investment adviser notice filing requirements. The article provides for succession and changes in the registration of broker-dealers or investment advisers, for the termination of employment or association of agents and investment adviser representatives, and for related transfers of employment or association. It provides for the withdrawal of registration of broker dealers, agents, investment advisers, and investment adviser representatives. It provides for filing fees, as well as post-registration requirements. Finally, the article provides for the denial, revocation, suspension, withdrawal, restriction, conditions, or limitations of registration.

Article 5 relates to fraud and liabilities. It sets forth prohibited conduct when providing investment advice. It also sets forth an evidentiary burden, provides for the filing of sales and advertising literature, and prohibits misleading filings and misrepresentations concerning registration or exemptions. The article also provides for qualified immunity, criminal penalties, civil liability, and recision offers.

Article 6 provides for administration and judicial review. It provides generally for administration of the chapter's provisions, investigations and subpoenas, and civil and administrative enforcement. It also includes special provisions governing rules, forms, orders, interpretative opinions, and hearings. It provides for public records and for their confidentiality. The article provides for uniformity and cooperation with other agencies. It includes provisions governing judicial review, jurisdiction, and service of process, and includes a severability clause.

Division II- Transition Provisions

Division II provides for the transition of administration. This includes applicability of the Act's new provisions to existing proceedings and existing rights and duties.

Division III - Conforming Changes

Division III contains provisions in other chapters that conform to changes made by the Act.

The Act takes effect January 1, 2005.

HOUSE FILE 2568 - Health Insurance - Miscellaneous Changes (full text of bill)

BY COMMITTEE ON WAYS AND MEANS. This Act contains provisions related to issues considered by the Individual Health Insurance Task Force. The provisions relate to individual health insurance market reforms under Code Chapter 513C and the Iowa Comprehensive Health Insurance Association (ICHA) governed under Code Chapter 514E, and address program eligibility, benefit design, rate structures, program administration, and funding of assessments.

Regarding program eligibility, the Act specifies that an ICHA policy under Code Chapter 514E is not considered "qualifying existing coverage" or "qualifying previous coverage." Certain provisions regarding basic and standard health plans are stricken effective January 1, 2005.

The Act provides that the Board of Directors of the ICHA, instead of the Insurance Commissioner, shall adopt forms and levels of coverage of basic and standard individual health benefit plans for the individual market that are substantially similar to the current state of the individual market.

The Act provides that all insurers, as designated by the Board of Directors of the ICHA with the approval of the commissioner, shall be included as members of the Iowa Individual Health Benefit Reinsurance Association. The Act directs the association to develop not only procedures but assessment mechanisms to make assessments and distributions as required to equalize individual carrier and organized delivery system gains or losses.

The Act limits eligible ICHA participants to residents, and, due to recommending the sunset of basic and standard plans beginning January 1, 2005, allows new participants in the ICHA plan to transfer from a basic or standard plan without a limitation on preexisting conditions. A provision regarding notification of potential eligibility for the ICHA is also modified. The Act modifies a provision related to the federal Trade Adjustment Act because the ICHA is the mechanism designated by the Governor pursuant to the trade Act.

A provision related to the payment of medically necessary health care services is amended. The Act addresses the provision of benefits, deductibles and coinsurance reflective of current individual insurance market conditions. The ICHA board is authorized to make benefit changes from time to time to remain current with market conditions. Lists of excluded expenses and benefit limitations are repealed and corresponding changes are made to delete unused definitions. Changes are made to remove an outdated reference to Code Chapter 513B, and to coordinate Code language with Medicare requirements.

A provision is amended to allow adjustments in ICHA rates to reflect rating characteristics in the marketplace and to allow an insurer to offset an assessment made under Code Chapter 514E against its premium tax liability pursuant to Code Chapter 432. The amendment allowing the offset takes effect January 1, 2005.