HSB 632 (LSB 5349XD (8) 90)

SENATE/HOUSE FILE _____

BY  (PROPOSED SECRETARY OF STATE BILL)

A BILL FOR

An Act providing for certain business entities by establishing a military service filing fee waiver, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 9.11, unnumbered paragraph 1, Code 2024, is amended to read as follows:
   As used in this subchapter part, unless the context otherwise requires:
    Sec. 2.  Section 9.12, Code 2024, is amended to read as follows:
   9.12  Rules.
   The secretary shall adopt rules pursuant to chapter 17A necessary or desirable to administer this subchapter part, including by offering and performing extra filing services upon request by filers. The rules may increase the amount of a surcharge implemented, assessed, and collected, or modify the period of service as provided under this subchapter part. 
    Sec. 3.  NEW SECTION.  9.21  Definitions.
   As used in this part, unless the context otherwise requires:
   1.  “Secretary” means the secretary of state.
   2.  “Waiver” means a military service filing fee waiver as provided in sections 9.22 and 9.23.
    Sec. 4.  NEW SECTION.  9.22  Rules.
   1.  The secretary of state shall adopt rules pursuant to chapter 17A necessary or desirable to administer this part.
   2.  The rules adopted pursuant to subsection 1 shall at least provide procedures governing a request by a qualified business entity to receive a military service filing fee waiver from the secretary, the secretary’s approval or rejection of that request, and the qualified business entity’s receipt and use of that waiver by an eligible filer, all as provided in sections 9.24 and 9.25.
    Sec. 5.  NEW SECTION.  9.23  Fees not subject to waiver.
   1.  This part does not apply to waive a fee imposed on a filed select document if the qualified business entity receives the waiver after the select document is filed, unless the secretary of state allows for the refund of such fee.
   2.  This part does not prohibit the refund of a filing fee otherwise authorized by another provision of law.
    Sec. 6.  NEW SECTION.  9.24  Military service filing fee waiver.
   Notwithstanding any other provision of law to the contrary, the secretary of state shall establish a military service filing fee waiver. The waiver shall apply to select documents, if filed on behalf of a qualified business entity by an eligible filer, and approved by the secretary, as provided in section 9.25.
    Sec. 7.  NEW SECTION.  9.25  Qualifications for business entities, eligibility for filers, and selection of documents —— criteria.
   1.  A business entity qualifies to receive a military service filing fee waiver if the business entity is any of the following:
   a.  A domestic limited partnership formed under chapter 488 or a foreign limited partnership transacting business in this state under that chapter.
   b.  A domestic limited liability company formed under chapter 489 or a foreign limited liability company doing business in this state under that chapter.
   c.  A domestic corporation formed under chapter 490 or a foreign corporation doing business in this state under that chapter.
   d.  A domestic nonprofit corporation formed under chapter 504 or a foreign nonprofit corporation transacting business in this state under that chapter.
   2.  An individual is eligible to sign for filing a select document receiving a waiver on behalf of the qualified business entity, if the individual is all of the following:
   a.  An interest holder in the qualified business entity.
   b.  Any of the following:
   (1)  An officer or enlisted member serving in the armed forces of the United States, including any component, part, or corps of the armed forces of the United States, as described in chapter 29A.
   (2)  An officer or enlisted member of the national guard or organized reserves of the armed forces of the United States; any regular, reserve, or auxiliary member of the United States coast guard; or any member of the civil air patrol.
   (3)  A veteran as defined in section 35.1.
   3.  A document is selected to receive a waiver only if the document is named in the following:
   a.  Section 488.117A, subsection 4, for limited partnerships.
   b.  Section 489.122, subsection 3A, for limited liability companies.
   c.  Section 490.122, subsection 4, for corporations.
   d.  Section 504.113, subsection 4, for nonprofit corporations.
   4.  The secretary by rule may provide for all of the following:
   a.  Additional requirements for the qualifications of a business entity, the eligibility of a filer, or a document’s selection for waiver.
   b.  A routine approval process.
    Sec. 8.  Section 488.117A, Code 2024, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  a.  Notwithstanding subsection 1, a limited partnership, filing as a qualified business entity under chapter 9, subchapter II, part 2, may request and shall receive a military service filing fee waiver for a select document.
   b.  For purposes of paragraph “a”, a select document is limited to any of the following:
   (1)  A certificate of limited partnership filed pursuant to section 488.201.
   (2)  An amendment to a certificate of limited partnership filed pursuant to section 488.202.
   (3)  A restatement of a certificate of limited partnership filed pursuant to section 488.202.
   (4)  An application for a certificate of authority filed pursuant to section 488.902.
    Sec. 9.  Section 489.122, Code 2024, is amended by adding the following new subsection:
   NEW SUBSECTION.  3A.  a.  Notwithstanding subsection 1, a limited liability company, or foreign limited liability company, filing as a qualified business entity under chapter 9, subchapter II, part 2, may request and shall receive a military service filing fee waiver for a select document.
   b.  For purposes of paragraph “a”, a select document is limited to any of the following:
   (1)  A certificate of organization filed pursuant to section 489.201.
   (2)  An amendment to a certificate of organization filed pursuant to section 489.202.
   (3)  A restatement of a certificate of organization filed pursuant to section 489.202.
   (4)  A foreign registration statement filed pursuant to section 489.903.
   (5)  A statement of domestication filed pursuant to section 489.1055.
    Sec. 10.  Section 490.122, Code 2024, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  a.  Notwithstanding subsection 1, a corporation, or a foreign corporation, filing as a qualified business entity under chapter 9, subchapter II, part 2, may request and shall receive a military service filing fee waiver for a select document.
   b.  For purposes of paragraph “a”, a select document is limited to any of the following:
   (1)  Articles of incorporation filed pursuant to section 490.202.
   (2)  Articles of domestication filed pursuant to section 490.922.
   (3)  An amendment to articles of incorporation filed pursuant to section 490.1001.
   (4)  Articles of restatement, with or without amendment, filed pursuant to section 490.1007.
   (5)  A foreign registration statement filed pursuant to section 490.1503.
    Sec. 11.  Section 504.113, Code 2024, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  a.  Notwithstanding subsection 1, a corporation, filing as a qualified business entity under chapter 9, subchapter II, part 2, may request and shall receive a military service filing fee waiver for a select document.
   b.  For purposes of paragraph “a”, a select document is limited to any of the following:
   (1)  Articles of incorporation filed pursuant to section 504.202.
   (2)  An amendment to articles of incorporation filed pursuant to section 504.1005.
   (3)  A restatement of articles of incorporation, with or without amendment, filed pursuant to section 504.1006.
   (4)  An application for a certificate of authority filed pursuant to section 504.1503.
    Sec. 12.  EFFECTIVE DATE.  This Act takes effect January 1, 2025.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   BACKGROUND (BUSINESS ENTITIES). A business entity is a general term for an association formed to conduct business under several types of organizational structures recognized by law (e.g., partnership and limited partnership, business and nonprofit corporation, limited liability company, and cooperative). Generally, a business entity may be formed as a domestic business entity in its home state or as a foreign business entity doing business in a state although it was formed in another home state. In Iowa, a business entity is governed under its own dedicated Code chapter, often based on model legislation with fee amounts reserved for decision by the enacting body. In Iowa, like most states, a business entity is under the general authority of the secretary of state (secretary).
   SUMMARY. This bill provides that a qualified business entity that requests and receives a military service filing fee waiver (waiver) from the secretary is not required to submit a fee for filing a number of select documents. The bill specifies qualifications for a business entity, eligibility for the filer of a select document, and the names of select documents having fees waived, subject to further requirements that the secretary may adopt by rule.
   STATUTORY ORGANIZATION. The bill amends Code chapter 9 establishing the secretary’s office. Specifically, it enacts new provisions in subchapter II of that Code chapter which currently includes provisions authorizing extra filing services. It also amends various Code chapters each of which governs a specific type of business entity. The bill amends the principal Code section in each such Code chapter that includes a laundry list of fees for filing documents.
   IN DETAIL —— QUALIFIED BUSINESS ENTITIES. First, in order to receive a waiver, the business entity must be qualified, meaning that the waiver is limited to a domestic or foreign limited partnership (Code chapter 488); domestic or foreign limited liability company (Code chapter 489); domestic or foreign business corporation (Code chapter 490); and domestic or foreign nonprofit corporation (Code chapter 504).
   IN DETAIL —— ELIGIBLE FILERS. Second, an individual acting on behalf of the qualified business entity must meet eligibility criteria. The individual must sign the document; must be an interest holder in the qualified business entity; and must be serving in the United States armed forces, the national guard or organized reserves, the United States coast guard, or the civil air patrol, or alternatively must be a veteran.
   IN DETAIL —— SELECT DOCUMENTS FOR FILING. Third, the filed document must be selected to receive the waiver. The bill provides that a number of different documents are subject to waiver as a select document depending upon the type of qualified business entity. A select document may include: an organic document that creates the domestic business entity, and which must include its name, place of business, and the name of its registered agent; an amendment to the organic document; a restatement that changes a document without changing its meaning (e.g., the consolidating amendments) or that changes the document’s meaning (the adoption of an amendment engrossed into the document); a certificate of authority that allows a foreign business entity to do or transact business in this state; or a statement of domestication which is required for certain business entities when changing from foreign to domestic status or vice versa.
   IN DETAIL —— FEES ASSOCIATED WITH SELECT DOCUMENTS. For a limited partnership, filing fees are established under Code section 488.117A. Select documents are limited to its organic document referred to as a certificate of limited partnership (Code section 488.201) and subject to a filing fee of $100 or an amendment to the certificate (Code section 488.202) subject to a filing fee in the same amount, a restatement of a certificate of limited partnership (Code section 488.202) subject to a filing fee of $5 under a catchall provision, and an application for a certificate of authority (Code section 488.902) subject to a filing fee of $100. For a limited liability company, filing fees are established under Code section 489.122. Select documents are limited to its organic document referred to as a certificate of organization (Code section 489.201) and subject to a filing fee of $50, an amendment to the certificate (Code section 488.202) subject to a filing fee in the same amount, a restatement of a certificate of organization (Code section 489.202) subject to a filing fee of $50, a foreign registration statement (Code section 489.903) subject to a filing fee of $100, and a statement of domestication (Code section 489.1055) subject to a filing fee of $5 under a catchall provision. For a business corporation, filing fees are established under Code section 490.122. Select documents are limited to its organic document referred to as articles of incorporation (Code section 490.202) subject to a filing fee of $50, an amendment to the articles (Code section 490.1001) subject to a filing fee in the same amount, and articles of restatement, with or without amendment (Code section 490.1007), that are subject to a filing fee in the same amount. It also includes articles of domestication (Code section 490.922) subject to a filing fee of $50, and a foreign registration statement (Code section 490.1503) subject to a filing fee of $100. For a nonprofit corporation, filing fees are delegated to the secretary under Code section 504.113 and established in 721 IAC 40.6. Select documents are limited to its organic document referred to as articles of incorporation (Code section 490.202) subject to a filing fee of $20 or an amendment to the articles (Code section 504.1005) subject to a filing fee of $10. It also includes articles of restatement (Code section 504.1006) subject to a filing fee of $20 if with amendments or $5 if not under a catchall provision, and an application for a certificate of authority (Code section 504.1503) subject to a filing fee of $25.
   EFFECTIVE DATE. The bill takes effect January 1, 2025.