Commerce Committee Report – Week 6, 2019

FLOOR ACTION:

SF 229 – Water treatment systems

SF 230 – Manufacturers of native distilled spirits, beer

COMMITTEE ACTION:

SF 320 – Permissible interest rates

SF 321 – Investment tax credits

SF 322– Enhance Iowa Board

SSB 1044 – Domestic stock insurers

SSB 1085 – Child labor exceptions for volunteers

SSB 1151– IID background checks, fraud investigators

FLOOR ACTION:

SF 229 – Water treatment systems

SF 229 (SF 25) updates current law regarding the unlawful practice of a person selling, leasing, renting or advertising a water treatment system. The bill amends the requirements so that the sale, lease, rental or advertisement of a water treatment system is not an unlawful practice if the claims and representations related to removal of health-related contaminants are certified by an organization accredited by the American National Standards Institute. The bill eliminates the requirements that a consumer be provided the manufacturer’s performance data sheet or a consumer information pamphlet from the Iowa Department of Public Health. The bill does not affect Code sections relating to the sale, lease, rental or advertisement of a water treatment system. Any fraudulent practice can be enforced under Chapter 714. The Attorney General can continue to investigate those who engaged in unlawful practice, and a court may impose a civil penalty. It is unlawful to sell, lease, rent or advertise a water treatment system in Iowa for which false or deceptive claims or representations of removing health-related contaminants are made, or for a person to make any representation or claim that the seller’s water treatment system has been approved or endorsed by any agency of the state. In 2018, similar legislation passed the Senate but was funneled by the House.
[2/20: 48-0 (Absent: Miller-Meeks; Vacant: Danielson)]

 

SF 230 – Manufacturers of native distilled spirits, beer

SF 230 (SSB 1021) relates to the authority of manufacturers of beer and native distilled spirits (Iowa Code Chapter 123). It amends the section concerning native distilleries by allowing a manufacturer of native distilled spirits to be issued a class “C” native distilled spirits liquor-control license, regardless of whether the manufacturer is also a manufacturer of beer; amends the section concerning limitations on business interests to provide that a manufacturer of beer may be granted one class “B” beer permit to sell beer at retail for consumption on or off the premises of the manufacturing facility regardless of whether the manufacturer also makes native distilled spirits; and amends the section concerning keeping liquor where beer is sold to allow liquor for beverage purposes to be used or kept at a premises for which both a class “B” beer permit and class “A” native distilled spirits license have been issued. The proposal was initiated by Toppling Goliath Brewing Company in Decorah, and also supported by the Iowa Wine Growers Association. The Iowa Alcoholic Beverage Division has no objections to the legislation, noting that it offers parity for breweries and does not change the state’s three-tier system. Those monitoring the bill include Iowa Wholesale Beer Distributors Association, Doll Distributing, Distilled Spirits Council of the United States, Travel Federation of Iowa, Anheuser Busch, ABI, The Wine Institute and Hy-Vee. There were no lobby declarations in opposition.
[2/18: 46-2 (No: Celsi, Costello; Absent: Miller-Meeks; Vacant: Danielson)]

 

COMMITTEE ACTION:

SF 320 – Permissible interest rates

SF 320 (SSB 1096) allows the Iowa Superintendent of Banking to adjust interest rates and finance charges for certain loans of $30,000 or less. It applies to non-depository lenders who acquire financing on the open market (banks and credit unions are depository lenders). These lenders offer installment loans to consumers, typically small loans for appliances or vehicles. Customers may prefer this local financing option to applying for a loan at another financial institution, delayed deposit companies (payday loans) or out-of-state online lenders that charge higher rates and fees.

Currently, the Superintendent can establish the maximum rate of interest or charges for regulated loans (Code Ch. 536, Regulated Loans) with unpaid principal balances of $10,000 or less. This increases that amount to $30,000. For loans with unpaid principal balances in excess of $30,000, the maximum interest rate or charges remains the greater of the rate permitted in Code Ch. 535 or the rate authorized for supervised financial organizations in Code Ch. 537. The bill authorizes a creditor to contract for and receive, for an interest-bearing consumer credit transaction, a service charge in an amount not to exceed 10 percent of the amount financed or $30, whichever is less. If the creditor has received such a service charge, the creditor cannot collect or retain a minimum charge upon prepayment as authorized under Code section 537.2510; rebate upon prepayment does not apply to service charges collected pursuant to the bill.

Similar legislation was introduced last session. Over the interim, stakeholders worked with the Banking Division and Attorney General’s office to refine the proposal to ensure regulation and consumer protection. The companies will continue to be regulated and licensed by the Superintendent of Banking and be under the jurisdiction of the Attorney General via the Uniform Consumer Credit Code. Companion bill HF 260 is on the House Calendar.
[2/19: short form (Excused: Miller-Meeks)]

 

SF 321 – Investment tax credits

SF 321 (SSB 1156) is a departmental proposal that allows the Iowa Economic Development Authority (IEDA) to allocate up to $4 million for Investment Tax Credits, otherwise known as Angel Tax Credits. This is an increase of $2 million from current law. The bill allows IEDA to allocate at least $6 million and not more than $8 million for Innovation Fund Investment Tax Credits. This allows IEDA to allocate up to $2 million less for Innovation Tax Credits from current law. These allocations must be determined on or before June 30 of each year. The bill keeps the overall cap on these types of credits to $10 million. The bill is effective upon enactment. These changes are estimated to cost $1.4 million in FY20 and $1.9 million in FY21 and after. The companion bill, HF 339 by Ways and Means, is on the House Calendar.

[2/19: short form (Excused: Miller-Meeks)]

 

SF 322– Enhance Iowa Board

SF 322 (SSB 1083) is an Iowa Economic Development Authority (IEDA) proposal and a companion to HF 305 by the House Economic Growth Committee. It increases the term of voting members on the Enhance Iowa Board from two to three years and provides a transition from the current two-year staggered terms to three-year staggered terms. The bill directs the Board, rather than the IEDA, to adopt rules to administer the programs established in Code Chapter 15F. It also eliminates the requirement that the Board, at the beginning of each fiscal year, allocate $100,000 from the community attraction and tourism fund to market projects receiving money from the fund.

[2/19: short form (Excused: Miller-Meeks)]

 

SSB 1044 – Domestic stock insurers

SSB 1044 allows Iowa domestic stock companies to divide into two or more insurers, and provides a process for regulatory approval for such actions. The insurer must file its plan with the Iowa Insurance Division and meet various requirements. The Division will determine whether to approve the plan. The proposal is modeled after Connecticut law, and does not apply to mutual insurance companies. The companion bill, HF 264, is on the House Calendar.
[2/19: short form (Excused: Miller-Meeks)]

 

SSB 1085 – Child labor exceptions for volunteers

SSB 1085 is an Iowa Economic Development proposal supported by the Iowa Commission on Volunteers Service, United Ways of Iowa and the YMCA State Alliance. It modifies current provisions of Code Chapter 92, which are Iowa child labor regulations regarding hours, permits, prohibited occupations and permitted occupations for those under 18. The proposal establishes three new exceptions from the law: a child who willfully volunteers, as defined by federal regulation, for a charitable or public purpose; a child 12 or older from being employed by a charitable organization or unit of state or local government as a referee for a sport program sponsored by that charitable organization or unit of government; and a child under 16 to serve in the Iowa Summer Youth Corps Program in Section 15H.5 or a child over 14 from serving in any other recognized program of Iowa National Service Corps Program, in accordance with Section 15H.9. As amended by the committee, these three new subsections must comply with prohibited hazardous occupations listed in Code section 92.8.
[2/19: short form (Excused: Miller-Meeks)]

 

SSB 1151– IID background checks, fraud investigators

SSB 1151 is based on a non-controversial proposal recommended by the Iowa Insurance Division (IID), with additional language by Sen. Chapman that requires the Division to dedicate at least two of its insurance fraud bureau investigators to investigate workers compensation cases. The Division is concerned that this stipulation is detrimental to its current fraud bureau staff, and requests that if the language is adopted, legislators consider providing for two additional investigators dedicated to workers compensation and funding for those two new full-time employees.

The original IID recommendation (SSB 1089/HF 426 on House Calendar) clarifies the IID’s authority to review possible fraud cases in all areas regulated by the Insurance Commissioner. It also adds authorization of criminal history checks for insurance producers and language to ensure licensing requirements meet new standards. The IID worked with the Department of Public Safety’s Division of Criminal Investigation to ensure the FBI can help in the fingerprinting portion of the criminal history checks. Almost all states require a criminal history background check for insurance producers.
[2/19: 10-6, party-line (Excused: Miller-Meeks)]