S.F. 118 Section 1. NEW SECTION . 82.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. “Appropriate request” means a civil, criminal, or 4 administrative subpoena or summons from a state, local, or 5 federal law enforcement authority. 6 2. “Domestic business entity” means a business entity 7 organized under the laws of this state that has no more than 8 fifty interest holders on the effective date of its corporate 9 or organizational existence, including but not limited to a 10 limited liability company as defined in section 489.102; a 11 corporation organized pursuant to chapter 490; a nonprofit 12 corporation organized under chapter 504; a partnership, 13 limited partnership, limited liability partnership, or limited 14 liability limited partnership as provided in chapter 486A 15 or 488; or a cooperative association or other cooperative 16 organized under this chapter or chapter 497, 498, 499, or 501, 17 but it does not include any of the following: 18 a. An entity licensed or authorized to do business as a 19 bank, savings and loan association, credit union, or other 20 depository institution, trust company, insurance company, 21 public utility, or securities or commodities broker or dealer. 22 b. An entity registered as an investment company under the 23 federal Investment Company Act of 1940. 24 c. An entity registered as an investment advisor under the 25 federal Investment Advisor Act of 1940. 26 d. An entity in which one or more entities of the types 27 described in paragraphs “a” through “c” holds, directly or 28 indirectly, a majority of the outstanding interests entitled to 29 vote on any issue. 30 e. An entity that holds, directly or indirectly, a majority 31 of the outstanding interests entitled to vote on any issue in 32 an entity of a type described in paragraphs “a” through “c” . 33 f. An entity registered as an exempt organization by the 34 internal revenue service. 35 -1- LSB 1033XS (5) 87 gh/rj 1/ 8

S.F. 118 3. “Governing individual” means an individual who is 1 designated to be responsible for governing a domestic business 2 entity, including but not limited to a manager of a limited 3 liability company; a director of a corporation; a director of 4 a nonprofit corporation; a general partner of a partnership, 5 limited partnership, limited liability partnership, or limited 6 liability limited partnership; or a director of a cooperative 7 association or other cooperative. 8 4. “Interest holder” means a person who holds an interest 9 in a domestic business entity, including but not limited to 10 a member of a limited liability company; a shareholder of a 11 corporation; a member of a nonprofit corporation; a member 12 of a general or limited partner of a partnership, limited 13 partnership, limited liability partnership, or limited 14 liability limited partnership; or a member of a cooperative 15 association or other cooperative. 16 5. “Person” means the same as defined in section 4.1. 17 6. “Transferable interest” means an interest holder’s right 18 to receive distributions. 19 7. “Transferee” means a person to which all or part of a 20 transferable interest has been transferred, whether or not the 21 transferee is an interest holder. 22 Sec. 2. NEW SECTION . 82.2 Access to ownership and control 23 information by law enforcement authorities. 24 1. A domestic business entity, upon receiving an 25 appropriate request from a state, local, or federal law 26 enforcement authority, shall provide in a timely manner 27 the following information to the requesting law enforcement 28 authority: 29 a. The name and last known address of each current interest 30 holder and transferee of which the domestic business entity has 31 actual knowledge. 32 b. The jurisdiction whose laws govern the internal affairs 33 of any current interest holder or transferee that is an entity. 34 c. The name and residential or business address of each 35 -2- LSB 1033XS (5) 87 gh/rj 2/ 8

S.F. 118 current governing individual. 1 d. A copy of each current governing individual’s passport, 2 driver’s license, or government-issued nondriver identification 3 card. 4 e. Records regarding the process by which the governing 5 individuals of the domestic business entity are elected or 6 otherwise designated. 7 f. Records indicating the voting power of each current 8 interest holder or records describing the manner in which each 9 interest holder’s voting power in the domestic business entity 10 is determined. 11 g. The name of all individuals responsible for producing the 12 information provided to a law enforcement authority pursuant 13 to this subsection. 14 h. A certification as required under subsection 2. 15 2. A domestic business entity providing information to a law 16 enforcement authority pursuant to subsection 1 shall include 17 a certification, signed under penalty of perjury, that the 18 information provided accurately reflects the current records of 19 the domestic business entity. 20 Sec. 3. NEW SECTION . 82.3 Judicial dissolution. 21 1. The district court may dissolve a domestic business 22 entity in a proceeding brought by the attorney general, if it 23 is established that the domestic business entity materially 24 failed to comply with an information request pursuant to 25 section 82.2. 26 2. Venue for a proceeding by the attorney general to 27 dissolve a domestic business entity pursuant to this section 28 lies in Polk county. 29 3. It is not necessary to make interest holders or 30 transferees parties to a proceeding to dissolve a domestic 31 business entity unless relief is sought against them 32 individually. 33 4. The court may issue injunctions, appoint a receiver or 34 custodian pendente lite with all powers and duties the court 35 -3- LSB 1033XS (5) 87 gh/rj 3/ 8

S.F. 118 directs, take other action required to preserve the domestic 1 business entity’s assets wherever located, and carry on the 2 business of the domestic business entity until a full hearing 3 can be held. 4 5. a. The court may appoint one or more receivers to wind 5 up and liquidate the business and affairs of the domestic 6 business entity. The court shall hold a hearing, after 7 notifying all parties to the proceeding and any interested 8 persons designated by the court, before appointing a receiver. 9 The court appointing a receiver has jurisdiction over the 10 domestic business entity and all its property wherever located. 11 b. The court may appoint an individual or an entity 12 authorized to transact business in this state as a receiver. 13 The court may require the receiver to post bond, with or 14 without sureties, in an amount the court directs. 15 c. The court shall describe the powers and duties of the 16 receiver in its appointing order, which may be amended from 17 time to time. Among other powers, the receiver may do either 18 or both of the following: 19 (1) Dispose of all or any part of the assets of the domestic 20 business entity wherever located, at a public or private sale, 21 if authorized by the court. 22 (2) Sue and defend in the receiver’s own name as receiver of 23 the domestic business entity in all courts of this state. 24 d. The court from time to time during the receivership may 25 order compensation paid and expenses paid or reimbursed to the 26 receiver from the assets of the domestic business entity or 27 proceeds from the sale of the assets. 28 6. a. If after a hearing the court determines that grounds 29 for dissolution as described in subsection 1 exist, the court 30 may enter a decree dissolving the domestic business entity and 31 specifying the effective date of the dissolution, and the clerk 32 of court shall deliver a certified copy of the decree to the 33 secretary of state, who shall file it. 34 b. After entering the decree of dissolution, the court shall 35 -4- LSB 1033XS (5) 87 gh/rj 4/ 8

S.F. 118 direct the winding up and liquidation of the domestic business 1 entity’s business and affairs in accordance with the laws of 2 this state. 3 Sec. 4. NEW SECTION . 82.4 Limitation of liabilities. 4 1. a. An individual who produces the information required 5 under section 82.2, subsection 1, shall not be held personally 6 liable to the domestic business entity or its interest holders 7 or transferees for producing, upon an appropriate request, the 8 information required under section 82.2, subsection 1. 9 b. An individual who produces the information required under 10 section 82.2, subsection 1, shall not be held personally liable 11 for any inaccuracy in or omission from the information required 12 under section 82.2, subsection 1, unless the production of such 13 information is reckless or involves intentional misconduct or 14 criminal conduct. 15 2. The interest holders, transferees, and governing 16 individuals of a domestic business entity shall not be held 17 personally liable for the debts, obligations, or other 18 liabilities of the domestic business entity solely arising from 19 its compliance or noncompliance with section 82.2. 20 Sec. 5. Section 602.8102, Code 2017, is amended by adding 21 the following new subsection: 22 NEW SUBSECTION . 21. Certify a copy of a decree of 23 dissolution of a domestic business entity to the secretary of 24 state as provided in section 82.3, subsection 6, paragraph “a” . 25 EXPLANATION 26 The inclusion of this explanation does not constitute agreement with 27 the explanation’s substance by the members of the general assembly. 28 This bill provides law enforcement authorities with access 29 to the ownership and control information of domestic business 30 entities. 31 The bill includes several definitions. The bill defines 32 “appropriate request” to mean a civil, criminal, or 33 administrative subpoena or summons from any state, local, or 34 federal law enforcement authority. “Domestic business entity” 35 -5- LSB 1033XS (5) 87 gh/rj 5/ 8

S.F. 118 is defined as a business entity organized under Iowa law that 1 has no more than 50 interest holders on the effective date of 2 its corporate or organizational existence, including but not 3 limited to limited liability companies, corporations, nonprofit 4 corporations, partnerships, limited partnerships, limited 5 liability partnerships, limited liability limited partnerships, 6 cooperative associations, and cooperatives. However, the 7 definition of “domestic business entity” does not include any 8 of the following: entities licensed to do business as banks 9 or other depository institutions, trust companies, insurance 10 companies, or securities or commodities brokers; entities 11 registered as investment companies under federal law; entities 12 registered as investment advisors under federal law; entities 13 controlled by or under the control of any entity not included 14 in the definition of “domestic business entity”; or entities 15 registered as exempt organizations by the internal revenue 16 service. “Governing individual” is defined as an individual 17 who is designated to be responsible for governing a domestic 18 business entity, including but not limited to directors and 19 general partners. “Interest holder” is defined as a person who 20 holds an interest in a domestic business entity, including but 21 not limited to shareholders, general or limited partners, or 22 members. “Person” is the same as defined in Code section 4.1. 23 “Transferable interest” is defined as an interest holder’s 24 right to receive distributions. “Transferee” is defined as a 25 person to which all or part of a transferable interest has been 26 transferred. 27 The bill requires a domestic business entity to provide 28 ownership and control information, in a timely manner, to 29 a requesting law enforcement authority upon receiving an 30 appropriate request from the authority. Such information must 31 include all of the following: the names and addresses of 32 current interest holders and known transferees; the governing 33 jurisdiction of any current interest holder or transferee that 34 is an entity; the names and addresses of current governing 35 -6- LSB 1033XS (5) 87 gh/rj 6/ 8

S.F. 118 individuals; copies of government-issued identification 1 documents of current governing individuals; records regarding 2 the process by which governing individuals are elected; 3 records regarding voting power; the names of the individuals 4 responsible for producing the information; and a certification 5 that the information provided is accurate, signed under penalty 6 of perjury. 7 The bill authorizes the district court to dissolve a 8 domestic business entity in a proceeding brought by the 9 attorney general if the entity materially fails to comply 10 with an information request required under the bill. Venue 11 for such a proceeding is in Polk county. A court in a 12 proceeding brought to dissolve a domestic business entity 13 may issue injunctions, appoint receivers or custodians, and 14 take any other action needed. However, a court must hold a 15 hearing prior to appointing a receiver. Such a receiver may 16 be an individual or an entity authorized to do business in 17 the state and may be required to post bond. The court must 18 describe the receiver’s powers and duties in its appointing 19 order. The court may order the domestic business entity to 20 compensate or reimburse the receiver for expenses from time to 21 time. If after a hearing the court determines that grounds 22 for dissolution exist, it may enter a decree dissolving the 23 domestic business entity on a specific date, a certified copy 24 of which is received and filed by the secretary of state. Such 25 a domestic business entity must wind up and liquidate its 26 business and affairs in accordance with Iowa law. 27 The bill prohibits individuals responsible for producing 28 information required under the bill from being held personally 29 liable for producing the information after receiving an 30 appropriate request or for any inaccuracies or omissions from 31 the information produced, except if the individual acts with 32 recklessness or the individual’s act involves intentional 33 misconduct or criminal conduct. Interest holders, transferees, 34 and governing individuals cannot be held personally liable for 35 -7- LSB 1033XS (5) 87 gh/rj 7/ 8