Commerce Committee – Week 13, 2021

FLOOR ACTION:

HF 236 – Reinvestments, collateralization by life insurance companies

HF 236 (SF 320) allows life insurance companies and associations to reinvest cash or cash-equivalent collateral for loans from securities held in their legal reserves in repurchase agreements collateralized by securities in U.S. government obligations maturing in 270 days or more, rather than the current law that states such agreements must mature in less than 270 days. It applies to reinvestments on or after January 1, 2022. The Federation of Iowa Insurers and Principal Financial Group support the measure.
[4/7: 44-0 (Excused: Brown, Carlin, Dawson, Hogg, Nunn, Schultz)]

HF 556 – Agricultural equipment dealership agreements

HF 556 (SF 454) clarifies the rights of agricultural equipment dealers to provide protections with the supplier when an agreement is terminated. It modifies current law regarding when a dealership agreement is terminated by cancellation or non-renewal. Regardless of which party terminated the agreement, the supplier must repurchase equipment and parts in the dealer’s inventory and must repurchase special tools and computer hardware or software required for the dealership.
[4/7: 44-0 (Excused: Brown, Carlin, Dawson, Hogg, Nunn, Schultz)]

HF 583 – Private flood insurance coverage

HF 583 (SF 460) is a recommendation by the Iowa Insurance Division based on a model act by the National Council of Insurance Legislators. The goal is to help foster an environment for innovative flood insurance, and give consumers greater choice in purchasing flood insurance coverage. New Code Chapter 515J provides standard provisions for policies to create coverage similar to the federally-backed National Flood Insurance Policy (NFIP) plans. Consumer protections and notices are included to inform the consumer of the policy features. These new sections provide guidance for rate and form filings, use of surplus lines, NFIP notice to applicant, and cancellation and non-renewal requirements.

Flooding is the most frequent and expensive natural disaster in the United States, yet typically not covered through most homeowner’s and renter’s insurance policies. Federal regulatory changes have created an opening where private flood insurance could be less expensive for consumers than options offered through NFIP. Federal officials are working with individual states to facilitate the development of the private flood insurance market so that consumers have access to alternative options.
[4/7: 44-0 (Excused: Brown, Carlin, Dawson, Hogg, Nunn, Schultz)]

HF 719 IID data security, cybersecurity standards

HF 719 (SF 553) is an Iowa Insurance Division recommendation to address an increasing number of data breaches in recent years involving large insurers that have exposed and compromised sensitive personal information of millions of insurance consumers. State insurance regulators made re-evaluation of the regulations around cybersecurity and consumer data protection a top priority.

The National Association of Insurance Commissioners began drafting the Insurance Data Security Model Law, which was adopted following almost two years of extensive deliberations and input from state insurance regulators, consumer representatives and the insurance industry. In an October 2017 report on the asset management and insurance industries, the U.S. Treasury Department recommended prompt adoption of the model by the states. If a state does not adopt and implement a model that results in uniform data security regulations within five years, Congress will pass legislation setting forth uniform requirements for insurer data security.

This bill exempts licensees with fewer than 10 employees and licensees compliant with the Health Insurance Portability and Accountability Act (HIPAA). It does not create a private cause of action, or limit an existing private right of action. The Commissioner may adopt rules to administer the bill, which would take effect January 1, 2022.
[4/7: 44-0 (Excused: Brown, Carlin, Dawson, Hogg, Nunn, Schultz)]

HF 775 – Sampling, recording devices on private property/agricultural animals, crops

HF 775 establishes the crime of unauthorized sampling under Iowa Code section 716.14. A person commits unauthorized sampling if they knowingly enter private property without consent of the owner or any other person having real or apparent authority to grant consent, and obtain samples of any materials. A first offense of unauthorized sampling is an aggravated misdemeanor. Second or subsequent offenses are Class “D” felonies. An aggravated misdemeanor is punishable by up to two years in prison and a fine of up to $8,450. A Class “D” felony is punishable by incarceration of up to five years and a fine of up to $10,245.

Agricultural animals include bovine (cows), caprine (goats), equine (horse), ovine (sheep), porcine (pigs), farm deer, ostriches, rheas, emus, turkeys, chickens, domestic geese or ducks, domestic fowl, honey bees, or fish or aquatic organisms confined to private waters for human consumption. Agricultural crops are any plant produced for food, animal feed, fiber, oil or fuel if the plant is classified as a forage or cereal plant. Agricultural crops specifically include alfalfa, barley, buckwheat, corn, flax, forage, hemp, millet, oats, popcorn, rye, sorghum, soybeans, sunflowers, wheat, or grasses used for forage or silage. Noxious weeds are not considered an agricultural crop unless the plant is produced as a research crop.

HF 775 also creates Iowa Code section 727.8A to provide that a person committing a trespass and knowingly places or uses a camera or electronic surveillance device that transmits or records images or data while the device is on the property commits an aggravated misdemeanor for a first offense and a Class D felony for a second offense.

HF 775 passed the House on a 72-24 vote.
[4/6: 35-11 (No: Bolkcom, Celsi, Giddens, Jochum, Lykam, Mathis, Petersen, Quirmbach, Ragan, Trone Garriott, Wahls); Excused: Dawson, Hogg, Nunn, Schultz)]

HF 805 – ICN billing system update 

HF 805 (SF 523) is a recommendation by the Iowa Telecommunications and Technology Commission to create efficiencies and reduce internal costs of state government by eliminating a duplicative billing step.

The Iowa Communications Network (ICN) currently invoices customers for the services it provides to them. Some customer agencies require connections to locations where the agencies provide services that are associated with their agency mission. The ICN has had discussions with stakeholders regarding the possibility of providing billing services on behalf of customer agencies, to eliminate the need for the ICN customer to issue a separate bill to their endpoint customer.

The services for which this billing process would occur are not ICN services, but services provided by the ICN’s customer agency and delivered across the ICN’s network. Specific requirements clarify that the billing service is not a means to provide or sell ICN services to entities that are not authorized to receive ICN services directly.
[4/7: 44-0 (Excused: Brown, Carlin, Dawson, Hogg, Nunn, Schultz)]

HF 848 – Broadband service areas, grant process

HF 848 (SF 390) makes changes to Iowa’s broadband grant program administered by the Office of Chief Information Officer (OCIO). The bill sets up a framework for awarding grants but does not allocate funds. The goal is to expand broadband across the state, improve speeds and encourage a rapid deployment by providers. The emphasis is on connecting Iowans who do not have a communications service provider that offers broadband internet access in their communities.

Highlights of the bill include:

  • The Empower Rural Iowa Broadband Grant Fund/Fiberoptic Network Conduit Installation Program. Expands the use of moneys in the Empower Rural Iowa Broadband Grant Fund to include for the Fiberoptic Network Conduit Installation Program. The OCIO coordinates this program to provide for the installation of fiberoptic network conduit where conduit does not exist. The bill also changes the amount that may be used to pay the costs and expenses associated with the administration and operation of the Grant Program and the Fiberoptic Network Conduit Installation Program from 1% to 2.5% of money in the Fund at the beginning of the Fiscal Year.
  • Eliminating certain public review provisions relating to the application process for grants.
  • Requiring OCIO to devote one FTE position to evaluate applications for grants, and provide technical assistance to providers applying for federal and other public or private funds.
  • Modifying the definition of “targeted service area” (TSA) with a three-tiered system: Tier 1-Maximum download speed of less than 25 megabits per second and a maximum upload speed of less than 3 megabits per second; Tier 2-Minimum download speed of greater than or equal to 25 megabits per second but less than 50 megabits per second; and Tier 3-Minimum download speed of greater than or equal to 50 megabits per second but less than 80 megabits per second.  
  • Redefining “underserved area” to mean any portion of a TSA in which no communications service provider facilitates broadband service meeting the Tier 1 download and upload speeds.  
  • Requiring that service providers awarded grants provide a minimum download speed of 100 megabits per second and a minimum upload speed of 100 megabits per second in targeted service areas, with exceptions in Tier 1 (areas where projects must be capable of 100/20 to receive a 50% match).
  • OCIO is not required to make renewed determinations of whether a communications service provider facilitates broadband service at or above the Tier 1, Tier 2 or Tier 3 download and upload speeds more than once a year, as determined by broadband availability maps.
  • OCIO will award grants not exceeding 50% of the total project costs to service providers that facilitate broadband service providing minimum download speeds of 100 megabits per second and minimum upload speeds of 20 megabits per second in a targeted service area in which no communications service provider offers or facilitates broadband service that provides download and upload speeds less than or equal to the Tier 1 speeds. At least 20% of the total grants must be awarded to projects that will result in the installation of broadband infrastructure in difficult to serve targeted service areas within which no communications service provider offers speeds less than or equal to the Tier 1 speeds. Grant amount is a percentage of the total project costs, determined by the broadband service that is available in the TSA: 75% for projects in a TSA where no provider offers or facilitates broadband service that provides download and upload speeds less than or equal to Tier 1; 50% for projects in a TSA where no provider offers or facilitates broadband service that provides download and upload speeds less than or equal to Tier 2; 35% for projects in a TSA where no provider offers or facilitates broadband service that provides download and upload speeds less than or equal to Tier 3.
  • Setting criteria for the OCIO to consider when reviewing an application for a grant, and states that OCIO must give the greatest weight to the factors (1), (2), (3) and (6): 

(1) The relative need for broadband infrastructure in the area and the existing broadband service speeds, including whether the project serves a rural area or areas.
(2) The applicant’s total proposed budget for the project, including (a) amount or percentage of local or federal matching funds, if any, and any funding obligations shared between public and private entities, and (b) percentage of funding provided directly from the applicant, including whether the applicant requested from the office an amount less than the maximum amount the office could award and if so, the percentage of the project cost that the applicant is requesting.
(3) The relative download and upload speeds of proposed projects for all applicants.
(4) The specific product attributes resulting from the proposed project, including technologies that provide higher qualities of service, such as service levels, latency and other service attributes as determined by the office.
(5) The percentage of the homes, farms, schools and businesses in the targeted service area that will be provided access to broadband service.
(6) The proportion of proposed projects that will result in the installation of broadband infrastructure in a targeted service area within which the only broadband service available provides the Tier 1 download and upload speeds.
(7) Other factors the office deems relevant.

  • Eliminating the provision that prohibits the OCIO from awarding grants from the Empower Rural Iowa Broadband Grant Fund on or after July 1, 2025.
  • Money in the Fund that has been awarded but not paid to a provider remains available to OCIO to administer the award.
  • Requiring the OCIO to adopt rules relating to the Broadband Grant Program process, management and measurements.
  • Authorizing the OCIO to adopt emergency rules.
  • Requiring the OCIO to adopt rules establishing procedures to allow applicants an opportunity to challenge awards granted by OCIO.
  • Effective upon enactment.

Sens. Petersen and Bolkcom offered an amendment stating that any communications service provider that receives a grant award must offer a schedule of reduced rates for broadband service to eligible individuals or households with an annual income which is 150% or less of the U.S. poverty level. The amendment lost on a 17-30 party line vote, Democrats voting “yes.”
[4/6: 47-0 (Excused: Hogg, Nunn, Schultz)]