Commerce Committee – Week 4, 2020


SF 2127 – Regulation of certain tobacco product

SF 2127 (SSB 3007) requires a person who engages in the business of a device (paraphernalia) retailer through a retail outlet or delivery sales to hold a tobacco retailer permit, comply with provisions applicable to a tobacco retailer, sell tobacco products in addition to devices at the retail outlet or through delivery sales, and hold a permit as a device retailer. It provides for application for and issuance of annual device retailer permits by cities and counties (depending on the location of the retailer) and requires a $1,000 fee for each permit. The device retailer permit holders must keep certain records and submit reports to the Department of Revenue. A device retailer must not sell, give or otherwise supply a device to any person under 18 and must verify the age of all purchasers. A device retailer can only display and sell devices in a location that ensures that the devices are not visible to a person younger than 18 and where no person younger than 18 is present or permitted.

It provides for the imposition, collection and payment of sales and excise taxes on the retail sale, including delivery sales, of devices. It creates a “specialty courts program fund” to support specialty courts in addressing underlying substance use disorder-related and mental health-related issues that contribute to the contact of individuals with the justice system. Moneys collected, with the exception of city and county permit fees, will be deposited in the fund. The bill also sets various penalties for violations.

Additionally, SF 2127 addresses claims made regarding hemp products sold at retail. Unless a state or federal agency has substantiated and approved the efficacy and safety claims of a product based on competent and reliable scientific evidence, a person engaging in the retail sale of a hemp product that contains hemp-derived cannabidiol, or in the retail sale of a cosmetic, personal care product, or product intended for human or animal consumption to which hemp-derived cannabidiol has been added in compliance with Code section 204.7(9), must include on the product’s principal display panel a statement that the product may contain the ingredients stated on the label, that the efficacy and safety of the product have not been substantiated or approved by a state or federal agency, and that the consumer should use the product at their own risk. A violation is a serious misdemeanor, as well as an unfair practice under Code 714.16.

The bill was referred to the Ways and Means Committee for further consideration.
[1/30: short form] 

SF 2131 – Reinsurance collateral requirements 

SF 2131 (SSB 3048) is a recommendation from the Iowa Insurance Division (IID). It puts Iowa among the first states to adopt necessary federal provisions. All states have five years to act to reduce reinsurance collateral requirements for certified non-U.S. licensed reinsurers that are licensed and domiciled in qualified jurisdictions or face potential federal preemption by the Federal Insurance Office under the federal Dodd-Frank Wall Street Reform and Consumer Protection Act. In exchange, the European Union and the United Kingdom will not impose local presence requirements on U.S. firms operating in the EU and the UK, and effectively must defer to U.S. group capital regulation for U.S. entities of EU-based and UK-based firms. The bill puts Iowa ahead in the insurance market, and alleviates concerns of insurance companies in the state as well as for carriers looking to domicile in Iowa.
[1/30: short form] 

SF 2132 – Life insurance companies legal reserve requirements

SF 2132 (SSB 3003) modifies Iowa Code definition of highly effective hedging transactions to National Association of Insurance Commissioners accounting guidance. Companion bill HF 2212 is on the House Calendar.
[1/30: short form] 

SF 2136 – Removal of city utility board members

SF 2136 (SF 562) allows removal of a member of a city utility board for cause by order of the mayor with approval of the city council. It provides that city utility board members may be removed from office by the mayor with the approval of the city council for habitual nonattendance of board meetings, or if sufficient evidence supporting any reason described in Code 66.1A, including neglect or refusal to perform duties, misconduct or maladministration, corruption, extortion, conviction of a felony, intoxication, or conviction of a violation of Iowa’s Campaign Finance laws (Ch. 68A). The original legislation was amended to exempt the City of Des Moines. The bill takes effect upon enactment.
[1/30: short form (No: Petersen, Quirmbach)]

SF 2137 – Mortgage extension filing requirements 

SF 2137 (SSB 3004) modifies a requirement that a mortgage extension agreement be filed in the same way as the original instrument (a.k.a. “ancient mortgages”). Currently, a mortgage (which is the underlying collateral for a debt instrument or promissory note) is enforceable for either 20 years or 10 years beyond any stated maturity in the debt instrument as long as the extension is filed of record. The bill does not change any time frames, but allows that the signing of the original mortgage authorizes the lender to file the extension on behalf of the borrower. This is compatible with real estate law by establishing the same procedure for extending financing statements under the Iowa Uniform Commercial Code. It will make loan administration for mortgages much easier for both financial institutions and borrowers. The original proposal was amended after discussions with the Community Bankers of Iowa, Iowa Bankers Association, the Iowa State Bar Association and the Iowa Attorney General’s Consumer Protection division.
[1/30: short form]