Commerce Committee – Week 6, 2022


SF 2213 –Third-party restaurant food delivery 

SF 2213 requires a restaurant and a food delivery service to have an agreement authorizing the service prior to a food delivery. It bans food delivery services (e.g.,  Uber Eats, DoorDash, Grubhub) from using a restaurant’s image, likeness, intellectual property or other identifying material, such as a menu, without a restaurant’s consent unless otherwise allowed by state or federal law and accompanied by a prominent disclaimer obvious to the customer indicating the food delivery service is independent from the restaurant.

The food delivery service must transport food in accordance with food safety provisions, including maintaining a food holding area that is frequently cleaned, maintaining the food for delivery at a holding temperature necessary to prevent spoilage, transporting the food in tamper-resistant and sealed containers, and refraining from smoking, vaping or carrying passengers in the delivery vehicle. A food delivery service that fails to maintain Iowa’s food safety requirements is liable to the restaurant for related injuries or harm.

A spokesperson monitoring the bill for the Attorney General’s Office commented that as food delivery became more popular during the pandemic, consumer complaints increased. The Iowa Restaurant Association had asked legislators to review the issue, and lawmakers will continue to work with stakeholders to craft a reasonable proposal. The companion is HF 2408.

[2/16: short form (Absent: Giddens)]

SF 2224 – Residential rental utility cost disclosure

SF 2224 establishes a new Code section in the residential landlord and tenant law provisions (Ch. 562A) relating to electric, gas, water or sewer utility service cost disclosure requirements for certain rental properties. It requires a landlord of rental property to disclose to a prospective tenant a utility service cost disclosure statement in writing. At least one adult entering into the tenancy must sign an acknowledgment form stating that the tenant received the disclosure statement upon completing the rental application or before signing the lease, which will be a defense to any claim that the landlord violated the disclosure provisions.

The disclosure statement must indicate the average annual costs for utility service for similar units in the rental property with the same number of bedrooms. If a landlord charges tenants using a ratio utility billing system, the cost information must include the average charges for utility service and any fees in the previous year for similar units. If a landlord has more than one rental property of similar construction and with the same utility service payment structure for the same public utility, the disclosure statement may indicate the average annual costs for dwelling units in all similar rental properties with the same number of bedrooms.

The landlord must obtain the cost information from the utility by sending a written request between January 1 and February 1 annually. The utility must compute and provide the information to the landlord at no charge within 30 days of receiving the request. If the rental property is new construction or was renovated in the previous year where the total cost of the renovation was greater than 25% of the assessed property value, or if the utility disclosure provisions do not apply to the applicable public utility, the landlord must include an estimate of anticipated annual utility service costs in the disclosure statement. The landlord must keep all records for at least one year. A tenant may inspect and copy the records on reasonable notice and during regular business hours.

The landlord must pay the tenant liquidated damages of $100 for a violation. If the landlord fails to pay the amount within 30 days of receiving a written request from the tenant, the tenant may bring a civil action in small claims court. If a final judgment is entered against the landlord, the tenant can recover $100 in damages, as well as court costs and reasonable attorney fees. The landlord will also be subject to a civil penalty of $500, to be remitted to the division of Community Action Agencies/Department of Human Rights. 

The bill does not apply to a rural electric cooperative or a municipal utility that does not provide budget billing to customers. The bill would take effect January 1, 2023. There is no House companion.
[2/16: short form (No: Lykam; Absent: Giddens)]

SF 2275 – Unemployment Insurance cuts; Tort liability

SF 2275 (SSB 3093) makes changes to Iowa’s Unemployment Insurance Program and puts restraints on tort liability. 

Division I—Unemployment 

The bill changes the language in the code relating to the “Guide for interpretation” for this chapter related to unemployment insurance. The GOP strikes language that states unemployment is a concern and a burden for the general interest and for the worker’s family. The GOP strikes language that states unemployment insurance benefits are for the public good.

The bill reduces the maximum number benefits available for unemployed Iowans from 26 weeks to 16 weeks. Most states offer 26 weeks of unemployment benefits. Ten states offer less than 26 weeks. This change takes money out of the pocketbooks of unemployed Iowans who EARNED this benefit and lost their job due to no fault of their own.

Current law allows for a different wage credit calculation and benefit duration for people who have been laid off due to the employer going out of business. For a typical claim, one-third of the claimant’s wage credits are used to calculate the current maximum benefit amount, and that maximum amount is for 26 weeks. For a business closing claim, the individual receives half of the wage credits for 39 weeks. The bill strikes the 39-week benefit duration when a business closes. These individuals are eligible for a maximum of 26 weeks under the bill proposal.

The bill establishes a one-week waiting period each benefit year: the first week of a claim for which a person is eligible for unemployment benefits but not paid these benefits. An individual would receive compensation for that “waiting period” week as the last payment on their regular unemployment claim. This is troubling because the maximum duration of unemployment benefits for claimants would be 16 weeks under the bill proposal. Generally, only 25% (pre-COVID) of claimants exhaust their benefits. In 2018, the average duration of benefits was 12.8 weeks. This means a claimant wouldn’t see that lost week of benefits if they went off unemployment before they exhausted their unemployment benefits. For jobless Iowans, no week is more important than the first week because most families have not had time to make financial adjustments or make progress in a job search.

If Iowa Workforce Development (IWD) finds that an individual failed to accept suitable work when it was offered to the individual, IWD can disqualify the individual from unemployment. The Code lays out what is considered “suitable work” [Ch.96.5(3)]. In addition to other criteria, suitable work means a certain amount of gross weekly wages as a percentage of the individual’s average weekly wage from when the person was employed. The bill reduces the amount of wages considered for suitable work AND reduces the number of weeks when these lower wages can be offered and considered suitable work.

The bill defines “misconduct.” If the Department finds that a claimant was discharged for misconduct, the individual is disqualified from unemployment benefits. Currently, “misconduct” is defined by administrative rule. The bill would define misconduct in the Iowa Code. Some of the language from the current administrative rule is in the new Code language. The bill includes a nonexclusive list of behaviors that constitute misconduct. Some of the items are concerning and ambiguous. Administrative Rules currently state that a general failure in good performance as a result of inability or incapacity is not misconduct. That language is not added to the new definition in the Iowa Code.

The bill allows for appeals on decisions from Iowa Workforce Development to go directly to district court, in addition to the current practice of appealing to the Employment Appeal Board.

Division II—Tort liability

The bill states that noneconomic damages do NOT include the loss of dependent care due to death of or severe injury to a spouse or a parent who is the primary caregiver of a child or disabled adult. These damages are economic damages. The loss of a primary caregiver would instead compute to the cost of full-time daycare without regard to the full effect on the child or household.

Current law provides that there is a soft cap of $250,000 for noneconomic damages that a patient can recover if the patient has been harmed by a health care provider. Current law does allow a jury to award above the $250,000 if the jury determines there is substantial or permanent loss or impairment of a bodily function, substantial disfigurement or death, which warrants a finding that imposition of such a limitation would deprive the plaintiff of just compensation for the injuries sustained. There is no cap in the current law for those cases. The bill puts a hard cap of $1 million on non-economic damages when the jury finds that there is substantial or permanent loss or impairment of a bodily function, substantial disfigurement or death that warrants exceeding the $250,000 cap in Iowa Code.

  • Allows a commercial motor vehicle employer to stipulate “respondeat superior” and thereby prohibit claims made on a theory of negligent hiring, training, supervising, trusting or other claims involving the employer’s negligence. A plaintiff will argue multiple theories of their case. This allows the victim the widest path to their damages, and separate theories will pursue different kinds of harm and wrongdoing.
  • Places a cap of $1 million for non-economic damages for personal injury or death, against the owner or operator of a commercial motor vehicle. The $1 million is regardless of the number derivate claims, theories of liability or defendants in civil action.
  • Forces the plaintiff to make their initial case without a claim for punitive damages. This will limit discovery at the initial stage of the suit and prolong the case overall. It allows the judge in the case to deny discovery later on the punitive damages.
    [2/14: short form (No: Bisignano, Lykam, Mathis, Petersen, Quirmbach; Absent: Chapman, Giddens, Nunn)]

SF 2276 – Direct health care agreements 

SF 2276 (SSB 3071) expands the types of health care professionals that may enter into a direct health care agreement to include health care professionals that perform “health care services” defined as services for the diagnosis, prevention, treatment, cure or relief of a health condition, illness, injury or disease, including dental care services. Currently, certain primary care health professionals may enter into a direct primary care agreement with a patient to provide primary care health services for a set service charge that covers a specific period of time. The bill would be effective upon enactment.

Opponents raised concerns about language regarding pre-existing conditions that would not apply to such agreements, and lack of consumer protections. There is no House companion.
[2/14: short form (No: Bisignano, Lykam, Mathis, Petersen, Quirmbach; Absent: Chapman, Giddens, Nunn)]

SF 2287 – Catalytic converter sales to scrap metal dealers 

SF 2287 (SSB 3088) adds transaction requirements for the sale of catalytic converters to scrap metal dealers. The bill: 

  • Provides that scrap metal dealers who fail to record the name, address and place of business, if any, and make a copy of a matching photo ID are guilty of theft. Scrap metal dealers must retain a photo of the catalytic converter and a copy of the receipt/invoice/junking certificate/sheriff’s approval, or they can be charged with theft. For business-to-business transactions, a copy of the sales tax permit is also required. Penalties range from a simple misdemeanor to a class “C” felony, depending on the value of the property.
  • Requires a copy of a photo ID and a business’s sales tax permit for a business transaction of catalytic converters
  • Defines a “business transaction” as being between a scrap metal dealer and any of the following, provided they operate from fixed locations:
    • Another scrap metal dealer
    • A vehicle recycler licensed under 321H
    • A motor vehicle dealer licensed under 322
    • An RV dealer licensed under 322C
    • A mechanic or employee of an automotive repair facility
  • Any transaction that is not a business transaction is subject to additional requirements, including:
    • Providing an original receipt, invoice, junking certificate or sheriff’s approval dated within 30 days
    • Upon sale, the original receipt/invoice/junking certificate/sheriff’s approval will be marked to indicate the catalytic converter was sold
    • A copy of the photo ID, a copy of the marked receipt/invoice/junking certificate/sheriff’s approval, and a photo of the catalytic converter must be retained by the scrap metal dealer for two years
    • Requires all scrap metal transactions involving a catalytic converter be paid by check or electronic funds transfer
  • Pre-empts all local ordinances regarding scrap metal regulations
  • Increases the civil penalty for violations of the recording requirements from $100 to $1,000 on the first offense, $500 to $5,000 on the second offense within two years, and $1,000 to $10,000 on the third offence within two years.
  • Allows scrap metal dealers that conduct a transaction in violation of the recording and verification procedures to be charged with aiding and abetting the underlying theft of the catalytic converter and to be charged with being an accessory after the fact.
  • Increases the scheduled fines for violations of 714.27 (scrap metal dealers) from $100 to $1,000 on the first violation, $500 to $5,000 for the second violation within two years, and $1,000 to $10,000 for the third violation within two years.
    [2/14: short form (No: Bisignano, Lykam, Mathis, Petersen, Quirmbach; Absent: Chapman, Giddens, Nunn)]

SF 2288 – Life insurer foreign investments

SF 2288 (SSB 3069) allows life insurance companies and associations to make investments issued by a counterparty outside of the United States or Canada of substantially the same type as those investments allowed currently (Code 511.8) if the aggregate amount of foreign investments held by the company or association is not more than 20% of its legal reserve, is not more than 10% of its legal reserve if the foreign jurisdiction has a sovereign debt rating of SVO 1, and for all other foreign jurisdictions, is not more than 3% of the legal reserve. The investments must be aggregated with investments of the same type made in a similar manner under all other subsections of Code section 511.8 for purposes of determining compliance with any limitations under those subsections. The bill takes effect January 1, 2023.
[2/14: short form (Absent: Chapman, Giddens, Nunn)]

SSB 3032 – IEDA omnibus 

SSB 3032 is an Iowa Economic Development Authority (IEDA) proposal to modify provisions involving Workforce Housing Tax Incentives, the High Quality Jobs Program and the Iowa Energy Center.

Workforce Housing Tax Incentives: IEDA may extend the project completion deadline for a project receiving workforce housing tax incentives only once, for up to 12 months. Recently, many projects have experienced construction delays caused by the increased cost of building materials, supply chain issues and workforce shortages due to the pandemic. Many projects will not be able to finish on time, even with an extension. The bill allows approval of one additional project completion deadline extension of up to 12 months in extenuating circumstances.

High Quality Jobs Program: IEDA may aid a business in an economically-distressed area that creates or retains jobs that pay a lower wage than that generally required for participation in the High-Quality Jobs Program. For the purposes of applying different wage thresholds, “economically distressed area” means a county that ranks among the bottom 33 of all Iowa counties, as measured by the average monthly unemployment level for the most recent 12-month period or the average annualized unemployment level for the most recent five-year period. The bill adds criteria to the “economically-distressed area” definition to include average weekly wage, family poverty rate, percent of population loss and percent of population older than 65. These changes will likely allow more rural counties to receive this designation. It also changes definitions of “small city” and “urban area” and streamlines burdensome reporting requirements for smaller communities. 

The Iowa Energy Center within IEDA has several purposes, including the support of public-private partnerships to assist with the development and commercialization of new energy technologies; support of rural and underserved areas and vulnerable populations by increased access to energy efficiency expertise, training and programs; cyber security preparedness for small utilities; encourage the growth of the alternative fuel vehicle market and the necessary infrastructure; and support efforts to modernize the electric grid infrastructure to bolster grid capacity.

The Energy Center Governing Board oversees existing loan agreements under the former Alternate Energy Revolving Loan Program and will oversee the newly-established Energy Infrastructure Revolving Loan Program, as well the Energy Center Grants Program. This section sunsets in July. In June 2021, Executive Order 9 established the Carbon Sequestration Task Force to explore carbon sequestration and the opportunities it presents for economic development. The bill adds support of carbon management strategies to the purposes of the Energy Center, and extends the sunset to July 1, 2027.

Supporters include the Iowa Housing Partnership, Iowa Environmental Council, Iowa Chamber Alliance, Hubbell Realty, Cedar Rapids Metro Economic Alliance, Principal Financial, Metropolitan Coalition, Council Bluffs Chamber, Iowa Association of Electric Cooperatives, Iowa Association of Municipal Utilities, Alliant Energy, MidAmerican Energy and Summit Carbon Solutions. The House companion, HF 2292 by Economic Growth, was referred to House Ways and Means.
[2/16: short form (Absent: Giddens)]

SSB 3070 – Port authorities

SSB 3070 modifies requirements for the creation of port authorities and public-private partnerships. It allows for the creation of a port authority by one or more political subdivisions rather than by two or more, and a port authority may be created anywhere in Iowa, regardless of proximity to a body of water. The bill states that a port authority is separate from its political subdivisions, and powers granted to the port authority may be exercised whether or not the political subdivisions exercise those same powers.

Political subdivisions comprising the port authority may make contributions to it, in addition to appropriating or expending public funds as currently allowed by law to finance or subsidize the operation and authorized purposes of the port authority, and pay the costs and expenses incurred by the port authority. The subdivisions may enter into agreements with each other or the port authority under certain circumstances. Loan agreements or lease contracts can be secured by a trust agreement between the port authority and a corporate trustee. Political subdivisions comprising the port authority, the state or any political subdivisions of the state, and the holders or owners of obligations owed under a loan agreement or lease contract cannot have taxes levied by the state or by a state governmental taxing authority for the payment of the principal of or interest owed on such obligations. 

There is no House companion. Supporters include the Iowa League of Cities, Greater Des Moines Partnership, Cedar Rapids Metro Economic Alliance, Iowa Chamber Alliance, Central Iowa Water Trails, Iowa State Bar Association, Professional Developers of Iowa, Iowa Association of Municipal Utilities, Master Builders of Iowa and the Ames, Quad Cities, Dubuque, Council Bluffs and Marshalltown area chambers of commerce.
[2/16: short form (Absent: Giddens)]

SSB 3124 – Reorganization of multiple housing cooperatives  

SSB 3124 establishes a reorganization option for cooperatives organized under Ch. 499A – Multiple Housing. It allows a 499A entity to merge with a limited liability company under Ch. 489, similar to the reorganization options cooperatives organized under Chapters 497, 498, 499 and 501 have. There are no new tax implications; owning rental property organized as a cooperative or an LLC are treated the same. 
[2/16: short form (Absent: Giddens)]

SSB 3125 – Municipal utilities regulation

SSB 3125 provides that municipally-owned gas or utility companies, electric public utilities having fewer than 10,000 customers, and electric cooperative corporations and associations are not subject to the Iowa Utilities Board regulatory authority except for the assessment of fees for the support of the Office of Consumer Advocate, safety standards, assigned areas of service, public utility railroad crossings, procedures for the disconnection of service, alternative energy program plans filed with the Board, specified civil penalties, energy cost information, distributed generation interconnection safety, utility-owned exterior flood lighting, customer contribution funds, electric power generation and transmission (Ch. 476A), and electric transmission lines (Ch. 478). The original proposal was amended to strike sections dealing with issues currently in litigation and to address concerns by the Iowa Utilities Board.
[2/16: short form (No: Bisignano, Petersen; Absent: Giddens)]

SSB 3126 – Sale of raw milk

SSB 3126 allows the sale of raw (unpasteurized) milk by dairy farmers to consumers as a “willing seller, willing buyer.” The raw milk could be sold at the dairy farm, delivered by the farmer to the consumer, or sold at a neutral meeting place. The raw milk or dairy product container must have a permanently-affixed label with a prominent “Notice to Consumers” stating that it holds raw milk or a dairy product that includes raw milk not subject to state inspection or other public health regulations that require pasteurization and grading.

The bill is supported by Americans for Prosperity. Opponents includes the Iowa Department of Agriculture and Land Stewardship, Iowa Veterinary Medical Association, Iowa Farm Bureau, Iowa State Dairy Association, Iowa Grocery Industry Association, Iowa Environmental Health Association and Iowa Dairy Foods Association. There is no House companion.
[2/16: short form (No: Mathis, Petersen, Quirmbach; Absent: Giddens)]

SSB 3127 – Electronic communications methods by financial institutions 

SSB 3127 adds electronic messaging as a communication method between an owner of specified forms of property and a banking or financial organization, or a business association under certain circumstances, can prevent the property from being considered abandoned, along with written correspondence. Consent for renewal of previously-held property between an owner and a banking or financial organization or a business association can be considered effective if notice was sent by electronic messaging and the notice is not returned to the bank for non-delivery. The State Treasurer’s Office and the Iowa Division of Banking are monitoring the legislation and have no objections. There is no House companion. The legislation is supported by the Iowa Credit Union League, Community Bankers of Iowa and the Iowa Bankers Association.
[2/16: short form (Absent: Giddens)]