House Study Bill 608 SENATE/HOUSE FILE BY (PROPOSED DEPARTMENT OF WORKFORCE DEVELOPMENT BILL) Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to priority of labor or wage claims over other 2 debts when an employer's property is placed in receivership or 3 otherwise seized by creditors. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5400DP 81 6 kh/gg/14 PAG LIN 1 1 Section 1. Section 626.69, Code 2005, is amended to read 1 2 as follows: 1 3 626.69 LABOR OR WAGE CLAIMS PREFERRED. 1 4 When the property of any company, corporation, firm, or 1 5 person shall be seized upon by any process of any court, or 1 6 placed in the hands of a receiver, trustee, or assignee, or 1 7their property shall beseized by the action of creditors, for 1 8 the purpose of paying or securing the payment of the debts of 1 9 such company, corporation, firm, or person, the debts, or 1 10 wages as defined under section 91A.2, subsection 7, owing to 1 11 all laborers or employees other than officers of such 1 12 companies, for labor or work performed or services rendered 1 13 withinthe ninety days nextsix months preceding the seizure 1 14 or transfer of such property,to an amount not exceeding one 1 15 hundred dollars to each person,shall be considered and 1 16 treated as a preferred debt and paid in full, or if thereis 1 17 not sufficientare insufficient funds realized from such 1 18 property to pay the same in full, then, after the payment of 1 19 costs, ratably out of thefundfunds remaining. 1 20 Sec. 2. Section 626.73, Code 2005, is amended to read as 1 21 follows: 1 22 626.73 PRIORITY. 1 23 Claims of employees for labor or wages, if not contested, 1 24 or if allowed after contest, shall have priority over all 1 25 claims against or liens upon such property, except prior 1 26 mechanics' liens for labor in opening or developing coal mines 1 27 as allowed by law. 1 28 Sec. 3. Section 680.7, subsection 3, Code 2005, is amended 1 29 to read as follows: 1 30 3. Debts owing to employees for labor or work performed or 1 31 services rendered asdefined byprovided in section 626.69. 1 32 Sec. 4. Section 680.8, Code 2005, is amended to read as 1 33 follows: 1 34 680.8 NONAPPLICABILITY. 1 35 The provisions of section 680.7 shall not apply to the 2 1 receivership of state banks, as defined in section 524.105, 2 2 trust companies, or private banks, and in the receivership of 2 3 such state banks and trust companies, or private banks, no 2 4 such preference or priority shall be allowed as is provided in 2 5saidthe section except for labor or wage claims as provided 2 6 by statute. 2 7 EXPLANATION 2 8 This bill extends the preference given to labor claims when 2 9 property is seized or placed under receivership to wage claims 2 10 for work or services provided. 2 11 Currently, the Code places a priority on labor claims for 2 12 labor performed within 90 days preceding the seizure or 2 13 transfer of the property to an amount not exceeding $100. In 2 14 addition to extending the preference to wage claims, the bill 2 15 extends the time period for labor or work performed or 2 16 services rendered to within six months preceding the seizure 2 17 or transfer of the property, and eliminates the $100 maximum 2 18 per person. The bill makes conforming changes to chapter 680 2 19 regarding receivers. 2 20 LSB 5400DP 81 2 21 kh:rj/gg/14