House File 2566
HOUSE FILE
BY COMMITTEE ON
GOVERNMENT OVERSIGHT
(SUCCESSOR TO HSB 719)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to farm mediation, by providing for participation
2 by foreign business entities.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 6909HV 80
5 da/pj/5
PAG LIN
1 1 Section 1. Section 654A.11, Code 2003, is amended by
1 2 adding the following new subsection:
1 3 NEW SUBSECTION. 3A. a. A creditor may submit an
1 4 affidavit to the mediator executed by an attorney affirming
1 5 that the borrower is a foreign business entity organized as a
1 6 limited liability partnership, corporation, limited liability
1 7 company, or cooperative association and that the entity has
1 8 not been issued a certificate by the secretary of state
1 9 authorizing the foreign business entity to conduct business in
1 10 this state, including any of the following:
1 11 (1) A certificate of authorization for a foreign limited
1 12 liability partnership as provided in chapter 486A.
1 13 (2) A certificate of authorization for a foreign limited
1 14 partnership as provided in chapter 488, if enacted in 2004
1 15 Iowa Acts, House File 2347.
1 16 (3) A certificate of authorization for a foreign
1 17 corporation as provided in chapter 490.
1 18 (4) A certificate of authorization for a foreign limited
1 19 liability company as provided in chapter 490A.
1 20 (5) A certificate of authorization for a foreign
1 21 corporation, cooperative, or cooperative association as
1 22 provided in chapter 499.
1 23 b. Upon receipt of the affidavit, the mediator shall issue
1 24 a release without further inquiry. If a civil action that
1 25 initiates a proceeding subject to this chapter is not
1 26 commenced within thirty days, the release is void. If the
1 27 court determines that the affidavit was incorrect, the court
1 28 shall dismiss the proceeding without prejudice. However, the
1 29 court may require that the plaintiff pay all court costs and
1 30 reasonable attorney fees of the borrower, which shall be taxed
1 31 as court costs.
1 32 Sec. 2. Section 654B.8, Code 2003, is amended by adding
1 33 the following new subsection:
1 34 NEW SUBSECTION. 2A. a. A farm resident may submit an
1 35 affidavit to the mediator executed by an attorney affirming
2 1 that the other party is a foreign business entity organized as
2 2 a limited liability partnership, corporation, limited
2 3 liability company, or cooperative association and that the
2 4 entity has not been issued a certificate by the secretary of
2 5 state authorizing the foreign business entity to conduct
2 6 business in this state, including any of the following:
2 7 (1) A certificate of authorization for a foreign limited
2 8 liability partnership as provided in chapter 486A.
2 9 (2) A certificate of authorization for a foreign limited
2 10 partnership as provided in chapter 488, if enacted in 2004
2 11 Iowa Acts, House File 2347.
2 12 (3) A certificate of authorization for a foreign
2 13 corporation as provided in chapter 490.
2 14 (4) A certificate of authorization for a foreign limited
2 15 liability company as provided in chapter 490A.
2 16 (5) A certificate of authorization for a foreign
2 17 corporation, cooperative, or cooperative association as
2 18 provided in chapter 499.
2 19 b. Upon receipt of the affidavit, the mediator shall issue
2 20 a release without further inquiry. If a civil action that
2 21 initiates a proceeding subject to this chapter is not
2 22 commenced within thirty days, the release is void. If the
2 23 court determines that the affidavit was incorrect, the court
2 24 shall dismiss the proceeding without prejudice. However, the
2 25 court may require that the plaintiff pay all court costs and
2 26 reasonable attorney fees of the other party, which shall be
2 27 taxed as court costs.
2 28 Sec. 3. Section 654C.5, Code 2003, is amended by adding
2 29 the following new subsection:
2 30 NEW SUBSECTION. 2A. a. A neighbor may submit an
2 31 affidavit to the mediator executed by an attorney affirming
2 32 that the owner is a foreign business entity organized as a
2 33 limited liability partnership, corporation, limited liability
2 34 company, or cooperative association and that the entity has
2 35 not been issued a certificate by the secretary of state
3 1 authorizing the foreign business entity to conduct business in
3 2 this state, including any of the following:
3 3 (1) A certificate of authorization for a foreign limited
3 4 liability partnership as provided in chapter 486A.
3 5 (2) A certificate of authorization for a foreign limited
3 6 partnership as provided in chapter 488, if enacted in 2004
3 7 Iowa Acts, House File 2347.
3 8 (3) A certificate of authorization for a foreign
3 9 corporation as provided in chapter 490.
3 10 (4) A certificate of authorization for a foreign limited
3 11 liability company as provided in chapter 490A.
3 12 (5) A certificate of authorization for a foreign
3 13 corporation, cooperative, or cooperative association as
3 14 provided in chapter 499.
3 15 b. Upon receipt of the affidavit, the mediator shall issue
3 16 a release without further inquiry. If a civil action that
3 17 initiates a proceeding subject to this chapter is not
3 18 commenced within thirty days, the release is void. If the
3 19 court determines that the affidavit was incorrect, the court
3 20 shall dismiss the proceeding without prejudice. However, the
3 21 court may require that the plaintiff pay all court costs and
3 22 reasonable attorney fees of the owner, which shall be taxed as
3 23 court costs.
3 24 EXPLANATION
3 25 This bill amends Code chapters 654A, 654B, and 654C, which
3 26 provide for mediation affecting agricultural producers. Code
3 27 chapter 654A requires mediation between creditors and farmers
3 28 who are borrowers prior to the enforcement of a legal action
3 29 to collect the debt. Code chapter 654B requires mediation in
3 30 disputes involving farmers who provide care and feeding to
3 31 livestock under contract. Code chapter 654C allows for
3 32 mediation between producers and neighbors negotiating for the
3 33 construction of animal feeding operation structures closer
3 34 than otherwise legally allowed to the neighbor's property.
3 35 Mediation is conducted by the farm mediation service (see Code
4 1 chapter 13).
4 2 Generally, the object of mediation is to provide a method
4 3 for parties in a dispute to reach an accommodation prior to
4 4 instituting a legal action. If an accommodation is reached,
4 5 the parties execute a settlement agreement, referred to as a
4 6 mediation agreement. If an accommodation is not reached, the
4 7 mediator issues a mediation release which allows a plaintiff
4 8 to file a claim for relief in district court. In the instance
4 9 of Code chapter 654C, legal action is not at issue because
4 10 mediation is initiated by the agricultural producer to obtain
4 11 a waiver of a statutory requirement. The mediator may also
4 12 issue a mediation release if the potential defendant in a
4 13 legal action fails to participate in mediation.
4 14 In all cases, a participant in mediation may be an
4 15 individual. The participant may also be a business entity
4 16 subject to the farmland ownership restrictions of Code
4 17 chapters 9H and 9I. The business entity is usually organized
4 18 as some form of limited liability partnership, corporation,
4 19 limited liability company, or cooperative or similar
4 20 association. The bill applies to these types of business
4 21 entities.
4 22 The bill provides that a party to mediation who is a
4 23 creditor, a farm resident, or a neighbor of an animal feeding
4 24 operation may submit an affidavit to the mediator executed by
4 25 an attorney affirming that the other party is a foreign
4 26 business entity (e.g., organized as a limited liability
4 27 partnership, corporation, limited liability company, or
4 28 cooperative association) and that the entity is not authorized
4 29 to do business in this state. The proof of authorization is
4 30 usually a certificate issued by the secretary of state. The
4 31 bill provides that upon receipt of the affidavit, the mediator
4 32 must issue a release. The party seeking a judicial remedy
4 33 must initiate a legal proceeding within 30 days.
4 34 LSB 6909HV 80
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