House File 2765 - Introduced HOUSE FILE BY COMMITTEE ON GOVERNMENT OVERSIGHT (SUCCESSOR TO HSB 772) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act concerning the military division of the department of 2 public defense. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6623HV 81 5 ec/gg/14 PAG LIN 1 1 Section 1. Section 29A.99, Code 2005, is amended by 1 2 striking the section and inserting in lieu thereof the 1 3 following: 1 4 29A.99 MAXIMUM RATE OF INTEREST. 1 5 1. An obligation or liability bearing interest at a rate 1 6 in excess of six percent per year that is incurred by a 1 7 service member either individually or jointly with the service 1 8 member's spouse before the service member enters military 1 9 service shall not bear interest at a rate in excess of six 1 10 percent per year during the service member's period of 1 11 military service. Interest that would otherwise be incurred 1 12 but for the prohibition in this section is forgiven. The 1 13 amount of any periodic payment due from a service member under 1 14 the terms of the instrument that created an obligation or 1 15 liability covered by this section shall be reduced by the 1 16 amount of the interest forgiven under this section that is 1 17 allocable to the period for which such payment is made. 1 18 2. In order for an obligation or liability of a service 1 19 member to be subject to the interest rate limitation in this 1 20 section, the service member shall provide to the creditor 1 21 written notice and a copy of the military orders calling the 1 22 service member to military service and any orders further 1 23 extending military service, not later than one hundred eighty 1 24 days after the date of the service member's termination or 1 25 release from military service. Upon receipt of written notice 1 26 and a copy of orders calling a service member to military 1 27 service, the creditor shall treat the debt in accordance with 1 28 this section, effective as of the date on which the service 1 29 member is called to military service. 1 30 3. A court may grant a creditor relief from the 1 31 limitations of this section if, in the opinion of the court, 1 32 the ability of the service member to pay interest upon the 1 33 obligation or liability at a rate in excess of six percent per 1 34 year is not materially affected by reason of the service 1 35 member's military service. 2 1 4. As used in this section, the term "interest" includes 2 2 service charges, renewal charges, fees, or any other charges, 2 3 except for bona fide insurance, with respect to an obligation 2 4 or liability. 2 5 Sec. 2. Section 29A.101A, Code 2005, is amended by 2 6 striking the section and inserting in lieu thereof the 2 7 following: 2 8 29A.101A TERMINATION OF LEASE BY SERVICE MEMBER == 2 9 PENALTY. 2 10 1. For purposes of this section, unless the context 2 11 otherwise requires: 2 12 a. "Premises lease" means a lease of premises occupied, or 2 13 intended to be occupied, by a service member or a service 2 14 member's dependents for a residential, professional, business, 2 15 agricultural, or similar purpose if either of the following 2 16 applies: 2 17 (1) The lease is executed by or on behalf of a person who 2 18 thereafter and during the term of the lease enters military 2 19 service. 2 20 (2) The service member, while in military service, 2 21 executes the lease and thereafter receives military orders for 2 22 a permanent change of station or to deploy with a military 2 23 unit, or as an individual in support of a military operation, 2 24 for a period of not less than ninety days. 2 25 b. "Vehicle lease" means a lease of a motor vehicle used, 2 26 or intended to be used, by a service member or a service 2 27 member's dependents for personal or business transportation if 2 28 either of the following applies: 2 29 (1) The lease is executed by or on behalf of a person who 2 30 thereafter and during the term of the lease enters military 2 31 service under a call or order specifying a period of service 2 32 of not less than ninety days, or who enters military service 2 33 under a call or order specifying a period of ninety days of 2 34 service or less and who, without a break in service, receives 2 35 orders extending the period of military service to a period of 3 1 not less than ninety days. 3 2 (2) The service member, while in military service, 3 3 executes the lease and thereafter receives military orders to 3 4 deploy with a military unit, or as an individual in support of 3 5 a military operation, for a period of not less than ninety 3 6 days. 3 7 2. A service member may terminate a premises lease or 3 8 vehicle lease pursuant to the requirements of this section. 3 9 Termination of a premises lease or vehicle lease shall be made 3 10 as follows: 3 11 a. By delivery by the lessee of written notice of such 3 12 termination, and a copy of the service member's military 3 13 orders, to the lessor or the lessor's grantee, or to the 3 14 lessor's agent or the agent's grantee. A lessee's termination 3 15 of a lease pursuant to this subsection shall terminate any 3 16 obligation a dependent of the lessee may have under the lease. 3 17 For purposes of this paragraph, written notice may be 3 18 accomplished by hand delivery, by private business carrier, or 3 19 by placing the written notice in an envelope with sufficient 3 20 postage and with return receipt requested, and addressed as 3 21 designated by the lessor or the lessor's grantee or to the 3 22 lessor's agent or the agent's grantee, and depositing the 3 23 written notice in the United States mail. 3 24 b. In the case of a vehicle lease, by return of the motor 3 25 vehicle by the lessee to the lessor or the lessor's grantee, 3 26 or to the lessor's agent or the agent's grantee, not later 3 27 than fifteen days after the date of the delivery of written 3 28 notice under paragraph "a". A lessee's termination of a lease 3 29 pursuant to this subsection shall terminate any obligation a 3 30 dependent of the lessee may have under the lease. 3 31 3. In the case of a premises lease that provides for 3 32 monthly payment of rent, termination of the lease is effective 3 33 thirty days after the first date on which the next rental 3 34 payment is due and payable after the date on which the notice 3 35 is delivered. In the case of any other premises lease, 4 1 termination of the lease is effective on the last day of the 4 2 month following the month in which the notice is delivered. 4 3 4. In the case of a vehicle lease, termination of the 4 4 lease is effective on the day on which the vehicle is 4 5 delivered to the lessor or the lessor's grantee. 4 6 5. Rents or lease amounts unpaid for the period preceding 4 7 the effective date of the lease termination shall be paid on a 4 8 prorated basis. In the case of a vehicle lease, the lessor 4 9 may not impose an early termination charge, but any taxes, 4 10 summonses, and title and registration fees and any other 4 11 obligation and liability of the lessee in accordance with the 4 12 terms of the lease, including reasonable charges to the lessee 4 13 for excess wear, use, and mileage, that are due and unpaid at 4 14 the time of termination of the lease shall be paid by the 4 15 lessee. 4 16 6. Rents or lease amounts paid in advance for a period 4 17 after the effective date of the termination of the lease shall 4 18 be refunded to the lessee by the lessor or the lessor's 4 19 assignee or the assignee's agent within thirty days of the 4 20 effective date of the termination of the lease. 4 21 7. Upon application by the lessor to a court before the 4 22 termination date provided in the written notice, relief 4 23 granted by this section to a service member may be modified as 4 24 justice and equity require. 4 25 8. a. Any person who knowingly seizes, holds, or detains 4 26 the personal effects, security deposit, or other property of a 4 27 service member or a service member's dependent who lawfully 4 28 terminates a lease covered by this section, or who knowingly 4 29 interferes with the removal of such property from premises 4 30 covered by such lease, for the purpose of subjecting or 4 31 attempting to subject any of such property to a claim for rent 4 32 accruing subsequent to the date of termination of such lease, 4 33 or attempts to do so, commits a simple misdemeanor. 4 34 b. The remedy and rights provided under this section are 4 35 in addition to and do not preclude any remedy for wrongful 5 1 conversion otherwise available under law to the person 5 2 claiming relief under this section. 5 3 EXPLANATION 5 4 The Iowa national guard civil relief provisions of Code 5 5 chapter 29A are amended by the bill. Code section 29A.99, 5 6 regarding the maximum rate of interest that may be charged on 5 7 preservice obligations, is rewritten by the bill. The bill 5 8 provides that the interest protection provided by the section 5 9 applies to joint obligations of a service member and the 5 10 service member's spouse and that any interest over 6 percent 5 11 is forgiven. 5 12 Code section 29A.101A, regarding termination of preservice 5 13 leases, is also rewritten by the bill. The rewritten section 5 14 provides that the lease termination provisions currently 5 15 applicable to real property leases also apply to motor vehicle 5 16 leases. The section sets out the notice and termination 5 17 requirements for each type of lease and provides that for 5 18 vehicle leases, the vehicle must be returned. The current 5 19 simple misdemeanor penalty for interference with a service 5 20 member or dependent in the exercise of rights under the 5 21 section is retained in the rewritten section. 5 22 LSB 6623HV 81 5 23 ec:nh/gg/14