H.F. 18 Section 1. Section 20.3, Code 2015, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 4A. “Fair share fee” means the amount 3 charged to an employee in a bargaining unit who is not a member 4 of the employee organization certified by the board as the 5 exclusive bargaining representative for the public employees 6 in that bargaining unit, to cover the costs incurred by the 7 employee organization on behalf of the employee for collective 8 bargaining, contract administration, the adjustment of 9 grievances, and the pursuit of other matters affecting wages, 10 hours, and other conditions of employment. 11 Sec. 2. Section 20.8, subsection 4, Code 2015, is amended 12 to read as follows: 13 4. Refuse to join or participate in the activities of 14 employee organizations, including the payment of any dues, fees 15 or assessments or service fees of any type , except as provided 16 in section 20.9A . 17 Sec. 3. Section 20.9, unnumbered paragraph 1, Code 2015, is 18 amended to read as follows: 19 The public employer and the employee organization shall meet 20 at reasonable times, including meetings reasonably in advance 21 of the public employer’s budget-making process, to negotiate in 22 good faith with respect to wages, hours, vacations, insurance, 23 holidays, leaves of absence, shift differentials, overtime 24 compensation, supplemental pay, seniority, transfer procedures, 25 job classifications, health and safety matters, evaluation 26 procedures, procedures for staff reduction, in-service training 27 and other matters mutually agreed upon. Negotiations shall 28 also include whether a fair share fee shall be charged to 29 nonmembers of the employee organization, terms authorizing 30 dues checkoff for members of the employee organization , and 31 grievance procedures for resolving any questions arising under 32 the agreement, which shall be embodied in a written agreement 33 and signed by the parties. If an agreement provides for dues 34 checkoff, a member’s dues may be checked off only upon the 35 -1- LSB 1281YH (1) 86 je/rj 1/ 7

H.F. 18 member’s written request and the member may terminate the dues 1 checkoff at any time by giving thirty days’ written notice. 2 Such obligation to negotiate in good faith does not compel 3 either party to agree to a proposal or make a concession. 4 Sec. 4. NEW SECTION . 20.9A Fair share fee procedures. 5 1. When a collective bargaining agreement between a public 6 employer and a certified employee organization, which provides 7 that a fair share fee shall be charged to nonmembers of the 8 employee organization, is reached by ratification of the 9 agreement or by issuance of an arbitration award under section 10 20.22, the public employer shall, within ten days of the date 11 the agreement is reached, provide the employee organization 12 with a list of the names and addresses of all employees in the 13 bargaining unit represented by the employee organization. If a 14 collective bargaining agreement providing for fair share fees 15 has a term of more than one year, the list shall be provided by 16 the public employer annually, not later than thirty days prior 17 to the commencement of the next full year of the agreement’s 18 term. 19 2. a. Following receipt by the employee organization of 20 a list of employees pursuant to subsection 1, the employee 21 organization shall provide the public employer with the name 22 of each nonmember of the employee organization and the amount 23 of the fair share fee. In addition, the employee organization 24 shall provide the labor commissioner with the amount of the 25 fair share fee and any supporting documentation utilized in 26 determining the amount of the fair share fee. Commencing on 27 the effective date of the collective bargaining agreement which 28 provides for a fair share fee or the public employer’s receipt 29 of the names and amounts from the employee organization, 30 whichever occurs later, the public employer shall deduct once 31 each month from the wages or salaries of each nonmember the 32 amount of the fair share fee specified for that nonmember by 33 the employee organization and transmit the amounts deducted 34 to the employee organization within fourteen days of the 35 -2- LSB 1281YH (1) 86 je/rj 2/ 7

H.F. 18 deduction. If a collective bargaining agreement includes a 1 retroactive effective date, the public employer shall make 2 deductions for fair share fees prospectively only. 3 b. For purposes of determining the fair share fee, the 4 amount of the fair share fee shall not exceed the regular 5 membership dues paid by members of the employee organization 6 and shall not include any share of the costs incurred by the 7 employee organization for fraternal, ideological, political, or 8 other activities not germane to collective bargaining, contract 9 administration, the adjustment of grievances, or the pursuit 10 of other matters affecting wages, hours, and other conditions 11 of employment. Costs that shall be excluded from the fair 12 share fee include but are not limited to costs for social 13 events; lobbying on issues or for purposes other than the 14 negotiation, ratification, or implementation of a collective 15 bargaining agreement; voter registration training; efforts to 16 increase voting; political campaign techniques; supporting or 17 contributing to charitable organizations; and supporting or 18 contributing to religious or other ideological causes. 19 3. As a precondition to the collection of a fair share fee, 20 the employee organization shall establish and maintain a full 21 and fair procedure that conforms with the requirements of the 22 Constitution of the United States and the Constitution of the 23 State of Iowa and does all of the following: 24 a. Provides nonmembers of the employee organization with 25 an annual notice which informs them of the amount of the 26 fair share fee to be charged, provides them with sufficient 27 information to gauge the propriety of that amount, and informs 28 them of the procedure by which a nonmember may challenge that 29 amount. 30 b. Permits challenges by nonmembers to the amount of the 31 fair share fee. 32 c. Provides for the consolidation of all timely challenges 33 and for an impartial hearing, before an arbitrator appointed by 34 the American arbitration association pursuant to its rules for 35 -3- LSB 1281YH (1) 86 je/rj 3/ 7

H.F. 18 impartial determination of union fees, conducted in accordance 1 with those rules and paid for by the employee organization. 2 d. Provides that the burden of proof relating to the 3 propriety of the amount of the fair share fee is on the 4 employee organization. 5 e. Provides that all fair share fees reasonably in dispute 6 while a challenge is pending shall be held by the employee 7 organization in an interest-bearing escrow account until a 8 final decision is issued by the arbitrator, at which time such 9 funds shall be disbursed in accordance with the arbitrator’s 10 decision. 11 4. The employee organization shall notify the public 12 employer of any arbitrator’s award issued pursuant to the 13 challenge procedure specified in subsection 3 which reduced the 14 amount of a fair share fee and the public employer shall adjust 15 its deduction from the wages or salaries of the challenging 16 nonmembers accordingly. 17 5. This section shall be enforced through an action in a 18 court of competent jurisdiction. 19 Sec. 5. Section 731.3, Code 2015, is amended to read as 20 follows: 21 731.3 Contracts to exclude unlawful. 22 It Except as provided in sections 20.8, 20.9A, and 731.4A, 23 it shall be unlawful for any person, firm, association, 24 corporation or labor organization to enter into any 25 understanding, contract, or agreement, whether written or 26 oral, to exclude from employment members of a labor union, 27 organization , or association, or persons who do not belong 28 to, or who refuse to join, a labor union, organization , or 29 association, or because of resignation or withdrawal therefrom. 30 Sec. 6. Section 731.4, Code 2015, is amended to read as 31 follows: 32 731.4 Union dues as prerequisite to employment —— prohibited. 33 It Except as provided in sections 20.8, 20.9A, and 731.4A, 34 it shall be unlawful for any person, firm, association, labor 35 -4- LSB 1281YH (1) 86 je/rj 4/ 7

H.F. 18 organization or corporation, or political subdivision, either 1 directly or indirectly, or in any manner or by any means as a 2 prerequisite to or a condition of employment to require any 3 person to pay dues, charges, fees, contributions, fines or 4 assessments to any labor union, labor association , or labor 5 organization. 6 Sec. 7. NEW SECTION . 731.4A Fair share fee agreements. 7 A labor union, labor association, labor organization, or 8 employee organization, which is the certified or recognized 9 exclusive representative for collective bargaining under 10 applicable federal law, may enter into an agreement with the 11 employer of the employees it is certified or recognized to 12 represent in collective bargaining that, as a condition of 13 continued employment, requires employees, after thirty days 14 of employment, either to become a member of the certified or 15 recognized labor union, labor association, labor organization, 16 or employee organization, or to pay a fair share fee to the 17 extent permitted by the Constitution of the United States, the 18 Constitution of the State of Iowa, and federal law. Nothing in 19 this section shall be deemed to require an employee to become a 20 member of a labor union, labor association, labor organization, 21 or employee organization. In addition, the requirements of 22 a fair share agreement shall not apply to an employee whose 23 initial date of employment with the employer occurs on a date 24 when a fair share fee agreement as authorized by this section 25 is not in effect. 26 Sec. 8. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 27 immediate importance, takes effect upon enactment. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill authorizes the negotiating of fair share fees in 32 collective bargaining agreements. 33 Code chapter 20, concerning collective bargaining for public 34 employees, is amended to authorize fair share fees. 35 -5- LSB 1281YH (1) 86 je/rj 5/ 7

H.F. 18 Code section 20.9 is amended to provide that the scope of 1 negotiations for purposes of a collective bargaining agreement 2 includes negotiating whether a fair share fee shall be charged 3 to nonmembers of an employee organization. 4 New Code section 20.9A establishes the procedures to follow 5 if a fair share fee is included in a collective bargaining 6 agreement. The new Code section provides that once an 7 agreement is ratified or an arbitration award is issued that 8 includes a fair share fee, the public employer shall, within 9 10 days, provide the employee organization with a list of 10 employees covered by the agreement. If the agreement has a 11 term of more than one year, the employer shall provide the list 12 on an annual basis. Once the employee organization receives 13 the list, the employee organization shall provide the employer 14 with a list of each nonmember of the employee organization and 15 the amount of the fair share fee. The employee organization 16 shall also inform the labor commissioner of the amount of the 17 fair share fee and how it was determined. The bill provides 18 that the fee shall not exceed the regular membership dues 19 paid by members and shall not include costs of the employee 20 organization that are not germane to collective bargaining, 21 contract administration, the adjustment of grievances, and 22 the pursuit of other matters affecting wages, hours, and 23 other conditions of employment. The bill provides that the 24 public employer shall begin deducting the fair share fee 25 from nonmembers upon the later of the effective date of the 26 collective bargaining agreement or the date the public employer 27 receives the list of nonmembers and the amount of the fair 28 share fee. The bill provides that no retroactive deductions 29 for fair share fees are allowed. 30 The bill also establishes several additional conditions for 31 the collection of a fair share fee from public employees. The 32 bill provides that nonmembers be given an annual notice of the 33 amount of the fair share fee and their rights as to challenging 34 the amount. The bill also provides that nonmembers shall be 35 -6- LSB 1281YH (1) 86 je/rj 6/ 7

H.F. 18 permitted to challenge the amount of the fair share fee at 1 an impartial hearing before an arbitrator appointed by the 2 American arbitration association. The bill provides that the 3 employee organization has the burden of proof relating to the 4 amount of the fee to be charged. The bill provides that the 5 employee organization shall notify the public employer of any 6 arbitrator’s award and the public employer shall adjust the 7 deduction from wages of the nonmembers who challenged the fair 8 share fee amount. The bill provides that the requirements of 9 this new Code section shall be enforced in a court of competent 10 jurisdiction. 11 Code chapter 731, concerning labor union membership, is 12 also amended to authorize fair share agreements. New Code 13 section 731.4A provides that a labor union, certified as the 14 bargaining representative of a private sector employer under 15 federal law, may enter into an agreement with an employer that, 16 as a condition of continued employment, requires employees whom 17 the union is certified to represent to become a member of the 18 labor union or to pay a fair share fee to the extent permitted 19 by the United States Constitution, the Iowa Constitution, and 20 applicable federal law. The new Code section provides that 21 nothing in this Code section shall be deemed to require an 22 employee to become a member of a labor union and also provides 23 that the requirement to pay a fair share fee shall not apply to 24 an employee whose initial date of employment occurred on a date 25 when a fair share agreement was not in effect. 26 The bill takes effect upon enactment. 27 -7- LSB 1281YH (1) 86 je/rj 7/ 7