House File 2308 - Introduced
HOUSE FILE
BY SMITH
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to consumer rental purchase agreement definitions
2 and references contained within the consumer credit code.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 5620HH 82
5 rn/nh/5
PAG LIN
1 1 Section 1. Section 423.31, subsection 4, Code 2007, is
1 2 amended to read as follows:
1 3 4. Every retailer at the time of making any return
1 4 required by this section shall compute and pay to the
1 5 department the tax due for the preceding period. The tax on
1 6 sales prices from the sale or rental of tangible personal
1 7 property under a consumer rental purchase agreement as defined
1 8 in section 537.3604, subsection 8 3, is payable in the tax
1 9 period of receipt.
1 10 Sec. 2. Section 535.17, subsection 5, paragraph c, Code
1 11 2007, is amended to read as follows:
1 12 c. "Credit agreement" means any contract made or acquired
1 13 by a lender to loan money, finance any transaction, or
1 14 otherwise extend credit for any purpose, and includes all of
1 15 the terms of the contract. "Credit agreement" does not mean a
1 16 contract to loan money, finance a transaction, or otherwise
1 17 extend credit by means of or pursuant to a credit card, as
1 18 defined in section 537.1301, subsection 17, or pursuant to
1 19 open=end credit, as defined in section 537.1301, subsection
1 20 31, or pursuant to a home equity line of credit, as defined in
1 21 section 535.10 whether the loan, financing, or credit is for
1 22 consumer or business purposes or a consumer rental purchase
1 23 agreement as defined in section 537.3604, subsection 8 3.
1 24 Sec. 3. Section 537.3604, Code 2007, is amended to read as
1 25 follows:
1 26 537.3604 GENERAL DEFINITIONS.
1 27 As used in this part, unless otherwise required by the
1 28 context:
1 29 1. "Administrator" means the administrator as designated
1 30 in section 537.6103.
1 31 2. "Advertisement" means a commercial message in any
1 32 medium, including signs, window displays, and price tags, that
1 33 promotes, directly or indirectly, a consumer rental purchase
1 34 agreement.
1 35 3. "Cash price" means the price at which the lessor in the
2 1 ordinary course of business would offer to sell the personal
2 2 property to the lessee for cash on the date of the consumer
2 3 rental purchase agreement.
2 4 3. "Consumer rental purchase agreement" means an agreement
2 5 for the use of personal property in which all of the following
2 6 are applicable:
2 7 a. The lessor is regularly engaged in the rental purchase
2 8 business.
2 9 b. The agreement is for an initial period of four months
2 10 or less, whether or not there is any obligation beyond the
2 11 initial period, that is automatically renewable with each
2 12 payment and that permits the lessee to become the owner of the
2 13 property.
2 14 c. The lessee is a person other than an organization.
2 15 d. The lessee takes under the consumer rental purchase
2 16 agreement primarily for a personal, family, or household
2 17 purpose.
2 18 e. The amount payable under the consumer rental purchase
2 19 agreement does not exceed twenty=five thousand dollars.
2 20 4. "Consummation" means the time at which the lessee
2 21 enters into a consumer rental purchase agreement.
2 22 5. "Lessee" means a natural person who rents personal
2 23 property under a consumer rental purchase agreement for
2 24 personal, family, or household use.
2 25 6. "Lessor" means a person who, in the ordinary course of
2 26 business, regularly leases, offers to lease, or arranges for
2 27 the leasing of property under a consumer rental purchase
2 28 agreement.
2 29 7. "Personal property" means any property that is not real
2 30 property under the laws of this state when it is made
2 31 available for a consumer rental purchase agreement.
2 32 8. "Consumer rental purchase agreement" means an agreement
2 33 for the use of personal property in which all of the following
2 34 are applicable:
2 35 a. The lessor is regularly engaged in the rental purchase
3 1 business.
3 2 b. The agreement is for an initial period of four months
3 3 or less, whether or not there is any obligation beyond the
3 4 initial period, that is automatically renewable with each
3 5 payment and that permits the lessee to become the owner of the
3 6 property.
3 7 c. The lessee is a person other than an organization.
3 8 d. The lessee takes under the consumer rental purchase
3 9 agreement primarily for a personal, family, or household
3 10 purpose.
3 11 e. The amount payable under the consumer rental purchase
3 12 agreement does not exceed twenty=five thousand dollars.
3 13 8. "Retail value" of personal property means the price at
3 14 which personal property of like type, quality, and quantity
3 15 would change hands between a willing seller and a willing
3 16 buyer, at retail, for cash, in the particular market area at
3 17 the time the consumer rental purchase agreement is entered
3 18 into, which price does not include any applicable sales, use,
3 19 privilege, excise, or documentary stamp taxes payable upon the
3 20 transfer of such property.
3 21 Sec. 4. Section 537.3605, subsection 9, Code 2007, is
3 22 amended to read as follows:
3 23 9. The cash price retail value of the merchandise.
3 24 Sec. 5. Section 537.3608, subsections 1 and 2, Code 2007,
3 25 are amended to read as follows:
3 26 1. A lessor shall not offer a consumer rental purchase
3 27 agreement in which fifty percent of all lease payments
3 28 necessary to acquire ownership of the leased property exceeds
3 29 the cash price retail value of the leased property. When
3 30 fifty percent of all lease payments made by a lessee equals
3 31 the cash price retail value of the property disclosed to the
3 32 lessee pursuant to section 537.3605, subsection 9, the lessee
3 33 shall acquire ownership of the leased property and the
3 34 agreement shall terminate.
3 35 2. At any time after tendering an initial lease payment, a
4 1 lessee may acquire ownership of the property that is the
4 2 subject of the consumer rental purchase agreement by tendering
4 3 an amount equal to the amount by which the cash price retail
4 4 value of the leased property exceeds fifty percent of all
4 5 lease payments made by the lessee.
4 6 EXPLANATION
4 7 This bill substitutes a definition of "retail value" for
4 8 the current definition of "cash price" contained within Code
4 9 section 537.3604 and applicable to consumer rental purchase
4 10 agreements. The bill defines "retail value" to refer to the
4 11 price at which personal property of like type, quality, and
4 12 quantity would change hands between a willing seller and a
4 13 willing buyer, at retail, for cash, in the particular market
4 14 area at the time the consumer rental purchase agreement is
4 15 entered into, excluding any applicable sales, use, privilege,
4 16 excise, or documentary stamp taxes payable upon the transfer
4 17 of such property. The bill makes corresponding substitutions
4 18 to refer to retail value as requiring disclosure by the lessor
4 19 in a consumer rental purchase agreement, and with reference to
4 20 acquiring ownership of leased personal property in specified
4 21 circumstances.
4 22 The bill makes a technical change reordering the definition
4 23 of "consumer rental purchase agreement" contained within Code
4 24 section 537.3604.
4 25 LSB 5620HH 82
4 26 rn/nh/5