Senate File 557 - Introduced SENATE FILE 557 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SF 216) (COMPANION TO HF 225 BY MOMMSEN) A BILL FOR An Act relating to demolition reserves on fire and casualty 1 claims on real property located within a city and requesting 2 an interim study on such reserves. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2245SV (1) 88 ko/rn
S.F. 557 Section 1. Section 515.139, subsection 1, unnumbered 1 paragraph 1, Code 2019, is amended to read as follows: 2 An insurer shall reserve ten twenty thousand dollars or ten 3 twenty percent, whichever amount is greater, of the payment for 4 damages to the property excluding personal property on which 5 the insurer has issued a fire and casualty insurance policy as 6 demolition cost reserve if the following are applicable: 7 Sec. 2. DEMOLITION RESERVE ON FIRE AND CASUALTY CLAIMS 8 ON PROPERTY —— STUDY REQUEST. The legislative council is 9 requested to establish an interim study committee for the 10 purpose of reviewing section 515.139 to consider whether the 11 statute adequately meets the needs of cities of various sizes 12 and geographic locations within the state, and reporting its 13 findings and recommendations, if any, to the general assembly. 14 EXPLANATION 15 The inclusion of this explanation does not constitute agreement with 16 the explanation’s substance by the members of the general assembly. 17 This bill provides that an insurer that has issued a fire 18 and casualty insurance policy for the payment of damages to 19 real property located in a city must reserve an amount equal to 20 $20,000 or 20 percent of the payment for damages, whichever is 21 greater, as a demolition cost reserve. Currently, the required 22 amount is $10,000 or 10 percent of the payment, whichever is 23 greater. 24 A city can claim proceeds from the reserve if the city incurs 25 costs to demolish a building where the damage to the property 26 renders it uninhabitable or unfit for its purpose, without 27 repair, and proof of loss indicates that damage to the insured 28 structure or building exceeds 75 percent of the face value of 29 the policy covering the building or structure. 30 The bill also includes a request that the legislative 31 council establish an interim study committee for the purpose of 32 reviewing the demolition reserve statute to consider whether 33 the statute adequately meets the needs of cities of various 34 sizes and geographic locations within the state. 35 -1- LSB 2245SV (1) 88 ko/rn 1/ 1