Bill Text: IA SF2378 | 2017-2018 | 87th General Assembly | Enrolled


Bill Title: A bill for an act relating to the boards of directors of public corporations, and including effective date provisions. (Formerly SSB 3183.) Various effective dates; see section 9 of bill.

Spectrum: Partisan Bill (? 1-0)

Status: (Passed) 2018-03-21 - Signed by Governor. S.J. 751. [SF2378 Detail]

Download: Iowa-2017-SF2378-Enrolled.html

Senate File 2378 - Enrolled




                              SENATE FILE       
                              BY  COMMITTEE ON JUDICIARY

                              (SUCCESSOR TO SSB
                                  3183)

                              (COMPANION TO lsb
                                  6163hv by committee on
                                  judiciary)
 \5
                                   A BILL FOR
 \1
                                       Senate File 2378

                             AN ACT
 RELATING TO THE BOARDS OF DIRECTORS OF PUBLIC
    CORPORATIONS, AND INCLUDING EFFECTIVE DATE PROVISIONS.

 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    Section 1.  Section 490.803, subsections 2 and 3, Code 2018,
 are amended to read as follows:
    2.  a.  The number of directors may be increased or decreased
 from time to time by amendment to, or in the manner provided
 in, the articles of incorporation or the bylaws.
    b.  (1)  Notwithstanding paragraph "a", the number of
 directors of a public corporation subject to section 490.806A,
 subsection 1, or section 490.806B, shall be increased or
 decreased only by the affirmative vote of a majority of its
 board of directors.
    (2)  This paragraph "b" is repealed on January 1, 2022.
    3.  a.  Directors are elected at the first annual
 shareholders' meeting and at each annual meeting thereafter
 unless their terms are staggered under section 490.806 or
 490.806A.
    b.  (1)  Notwithstanding paragraph "a", for a public
 corporation subject to section 490.806A, subsection 1, or
 section 490.806B, a director's term shall be staggered as
 provided in section 490.806A, subsection 1, or may be staggered
 as provided in section 490.806B.
    (2)  This subparagraph is repealed on January 1, 2022.
    Sec. 2.  Section 490.805, subsections 2 and 4, Code 2018, are
 amended to read as follows:
    2.  a.  The terms of all other directors expire at the next
 annual shareholders' meeting following their election unless
 their terms are staggered under section 490.806 or 490.806A.
    b.  (1)  Notwithstanding paragraph "a", for a public
 corporation subject to section 490.806A, subsection 1, or
 section 490.806B, the terms of directors shall be staggered as
 provided in section 490.806A, subsection 1, or may be staggered
 as provided in section 490.806B.
    (2)  This paragraph "b" is repealed on January 1, 2022.
    4.  a.  The term of a director elected to fill a vacancy
 expires at the next shareholders' meeting at which directors
 are elected, except as provided in section 490.806A.
    b.  (1)  Notwithstanding paragraph "a", for a public
 corporation subject to section 490.806A, subsection 1, or
 section 490.806B, the term of a director elected to fill a
 vacancy expires as provided in section 490.806A, subsection 1,
 or section 490.806B.
    (2)  This paragraph "b" is repealed on January 1, 2022.
    Sec. 3.  Section 490.806, Code 2018, is amended to read as
 follows:
    490.806  Staggered terms for directors.
    1.  Except as otherwise provided in section 490.806A, a
 corporation's The articles of incorporation may provide for
 staggering the terms of its directors by dividing the total
 number of directors into two or three groups, with each group
 containing one=half or one=third of the total, as near as may
 be. In that event, the terms of directors in the first group
 expire at the first annual shareholders' meeting after their
 election, the terms of the second group expire at the second
 annual shareholders' meeting after their election, and the
 terms of the third group, if any, expire at the third annual
 shareholders' meeting after their election. At each annual
 shareholders' meeting held thereafter, directors shall be
 chosen for a term of two years or three years, as the case may
 be, to succeed those whose terms expire.
    2.  a.  Subsection 1 does not apply to a public corporation
 that is subject to section 490.806A, subsection 1, but may
 apply to a public corporation that is subject to section
 490.806B.
    b.  This subsection is repealed on January 1, 2022.
    Sec. 4.  Section 490.806A, Code 2018, is amended by adding
 the following new subsection:
    NEW SUBSECTION.  3.  This section is repealed on January 1,
 2022.
    Sec. 5.  NEW SECTION.  490.806B  Public corporations ====
 nonstaggered terms.
    1.  Notwithstanding section 490.806A, the board of directors
 of any public corporation which, as of January 1, 2019, is
 subject to section 490.806A, subsection 1, shall adopt an
 amendment to its articles of incorporation that includes all
 of the following:
    a.  The staggered terms of the class I directors, class II
 directors, and class III directors elected or appointed prior
 to January 1, 2019, shall cease at the expiration of their then
 current terms as provided in section 490.806A, subsection 1.
    b.  The terms of directors elected or appointed on or after
 January 1, 2019, shall expire at the next annual shareholders'
 meeting following their election or appointment.
    c.  Any other changes that the directors determine are
 necessary to implement the provisions of this subsection.
    2.  Any amendment to the articles of incorporation as
 provided in subsection 1 shall be made without shareholder
 approval.
    3.  Notwithstanding subsection 1, the public corporation's
 articles of incorporation may provide for staggering the terms
 of its directors as provided in section 490.806.
    4.  Section 490.803, subsection 2, paragraph "b", and section
 490.810, subsection 1A, shall continue to apply to a public
 corporation subject to subsection 1 of this section.
    5.  This section is repealed on January 1, 2022.
    Sec. 6.  Section 490.810, subsection 1A, Code 2018, is
 amended to read as follows:
    1A.  a.  For a public corporation subject to section
 490.806A, subsection 1, or section 490.806B, a vacancy on the
 board of directors, including but not limited to a vacancy
 resulting from an increase in the number of directors, shall
 be filled solely by the affirmative vote of a majority of the
 remaining directors, even though less than a quorum of the
 board.
    b.  This subsection is repealed on January 1, 2022.
    Sec. 7.  Section 490.1005A, Code 2018, is amended by adding
 the following new subsection:
    NEW SUBSECTION.  3.  This section is repealed on January 1,
 2022.
    Sec. 8.  CONTINUATION OF THE ARTICLES OF INCORPORATION.
 Notwithstanding the repeals of section 490.806A, as amended
 by this Act and section 490.806B as enacted by this Act,
 any amendment to the articles of incorporation of a public
 corporation adopted in compliance with section 490.806A or
 section 490.806B as described in this section and in effect
 immediately prior to January 1, 2022, shall remain in effect
 until amended or repealed as provided in the relevant sections
 of chapter 490 as those sections exist on or after January 1,
 2022.
    Sec. 9.  EFFECTIVE DATE.  The following takes effect January
 1, 2019:
    The section of this Act enacting section 490.806B.


                                                                                            JACK WHITVER


                                                                                            LINDA UPMEYER


                                                                                            W. CHARLES SMITH


                                                                                            KIM REYNOLDS

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