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PAG LIN 1 1 Section 1. Section 12.32, Code 1995, is amended to read as 1 2 follows: 1 3 12.32 DEFINITIONS. 1 4 As used in this division, unless the context otherwise 1 5 requires: 1 6 1. "Eligible borrower" means any person who is in the 1 7 business or is entering the business of producing, processing, 1 8 or marketing horticultural crops or nontraditional crops in 1 9 this state or any person in this state who is qualified to 1 10 participate in one of the programs in this division. 1 11 2. "Eligible lending institution" means a financial 1 12 institution that is empowered to make commercial loans,and is 1 13 eligible pursuant to chapter 12C to be a depository of state 1 14 funds, and agrees to participate in the linked investments for1 15tomorrow program. 1 16 3. "Linked investment" means a certificate of deposit 1 17 placed pursuant to this division by the treasurer of state 1 18 with an eligible lending institution, at an interest rate not 1 19 more than three percent below current market rates on the 1 20 condition that the institution agrees to lend the value of the 1 21 deposit, according to the investment agreement provided in 1 22 section12.3712.35, to an eligible borrower at a rate not to 1 23 exceed four percent above the rate paid on the certificate of 1 24 deposit. 1 25 Sec. 2. Section 12.34, subsection 2, Code 1995, is amended 1 26 to read as follows: 1 27 2. The treasurer shall adopt rules pursuant to chapter 17A 1 28 toimplementadminister this divisionincluding, but not1 29limited to, rules identifying horticultural crops and1 30nontraditional crops for which the linked investments may be1 31loaned. 1 32 Sec. 3. Section 12.34, Code 1995, is amended by adding the 1 33 following new subsection: 1 34 NEW SUBSECTION. 3. Certificates of deposit placed by the 1 35 treasurer on or after July 1, 1996, pursuant to this division 2 1 may be renewed at the option of the treasurer. The initial 2 2 certificate of deposit for a given borrower shall have a 2 3 maturity of one year and may be renewed for eight additional 2 4 one-year periods. 2 5 Sec. 4. Section 12.35, Code 1995, is amended to read as 2 6 follows: 2 7 12.35 APPLICATION. 2 8 1. An eligible lending institution that desires to receive 2 9 a linked investment shall enter into an agreement with the 2 10 treasurer of state, which shall include requirements necessary 2 11 for the eligible lending institution to comply with this 2 12 division. 2 131.2. An eligible lending institution that desires to 2 14 receive a linked investment shall accept and review 2 15 applications for loans from eligible borrowers.The lending2 16institution shall apply all usual lending standards to2 17determine the credit worthiness of each eligible borrower.2 18Loan applications shall be for the purchase or lease of land,2 19machinery, equipment, seed, fertilizer, direct marketing2 20facilities, or new or expanding processing facilities for2 21horticultural crops or nontraditional crops. The maximum size2 22of a loan is two hundred thousand dollars per borrower for a2 23production loan and five hundred thousand dollars for2 24processing or marketing facilities.2 252.3. The eligiblefinanciallending institution shall 2 26 forward to thestatetreasurer of state a linked investment 2 27 loan package in the form and manner as prescribed by the 2 28 treasurer of state. The package shall include information 2 29 required by the treasurer of state, including but not limited 2 30 to the amount of the loan requested and the purpose of the 2 31 loan. The institution shall certify that the applicant is an 2 32 eligible borrowerand shall certify the present borrowing rate2 33applicable to the specific eligible borrower. 2 34 Sec. 5. Section 12.36, Code 1995, is amended to read as 2 35 follows: 3 1 12.36 ACTIONS BY TREASURER– AGREEMENT. 3 2 1. The treasurer of state shall accept or reject a linked 3 3 investment loan package or any portion of the package based on 3 4 the type or terms of the loan involved, the availability of 3 5 state funds, or the compliance of the eligible borrower or 3 6 eligible lending institution. 3 7 2. Upon acceptance of the linked investment loan package 3 8 or any portion of the package, the treasurer of state shall 3 9 place certificates of deposit with the eligible lending 3 10 institution at a rate not more than three percent below the 3 11 current market rate.After July 1, 1992, theThe treasurer of 3 12 state shall not place a certificate of deposit with an 3 13 eligible lending institution pursuant to this division, unless 3 14 the certificate of deposit earns a rate of interest of at 3 15 least two percent.When necessary, the treasurer may place3 16certificates of deposit prior to acceptance of a linked3 17investment loan package.Interest earned on the certificate 3 18 of deposit and principal not renewed shall be remitted to the 3 19 treasurer of state at the time the certificate of deposit 3 20 matures. Certificates of deposit placed pursuant to this 3 21 division are not subject to a penalty for early withdrawal. 3 223. The eligible lending institution shall enter into an3 23investment agreement with the treasurer of state, which shall3 24include requirements necessary to carry out this division.3 25The requirements shall reflect the market conditions3 26prevailing in the eligible lending institution's lending area.3 27The agreement may include a specification of the period of3 28time in which the lending institution is to lend funds upon3 29the placement of a linked investment, and shall include3 30provisions for the certificates of deposit to be placed for3 31one-year maturities that may be renewed for eight additional3 32one-year periods. Interest shall be paid at the times3 33determined by the treasurer of state.3 34 Sec. 6. Section 12.38, Code 1995, is amended to read as 3 35 follows: 4 1 12.38 REPORTS. 4 2 By February 1 of each year, the treasurer of state shall 4 3 report on the linked investments for tomorrowprogram, the4 4rural small business transfer linked investment loan program,4 5the targeted small business linked investments program, and4 6the main street linked investments loan programprograms for 4 7 the preceding calendar year to the governor, the department of 4 8 economic development, the speaker of the house of 4 9 representatives, and the president of the senate. The speaker 4 10 of the house shall transmit copies of this report to the house 4 11 co-chair of the joint economic development appropriations 4 12 subcommittee and the chairs of the standing committees in the 4 13 house which customarily consider legislation regarding 4 14 agriculture and commerce, and the president of the senate 4 15 shall transmit copies of this report to the senate co-chair of 4 16 the joint economic development appropriations subcommittee and 4 17 the chairs of the standing committees in the senate which 4 18 customarily consider legislation regarding agriculture and 4 19 commerce. The report shall set forth the linked investments 4 20 made by the treasurer of state under the program during the 4 21 year, the total amount deposited, the number of deposits, and 4 22 an estimate of foregone interest, and shall include 4 23 information regarding the nature, terms, and amounts of the 4 24 loans upon which the linked investments were based and the 4 25 eligible borrowers to which the loans were made. 4 26 Sec. 7. Section 12.40, Code 1995, is amended to read as 4 27 follows: 4 28 12.40 RURAL SMALL BUSINESS TRANSFER LINKED INVESTMENT LOAN 4 29 PROGRAM. 4 30 1. As used in this section, "rural small business" means 4 31 an existing rural small business, for which local competition 4 32 does not exist in the principal realm of business activity of 4 33 that business, and the loss of which will work a hardship on 4 34 the rural community. A rural small business may include a 4 35 grocery store, drug store, gasoline station, convenience 5 1 store, hardware business, or farm supply store. A rural small 5 2 business does not include a new business. 5 3 2. The treasurer of state shall adopt rules consistent 5 4 with this division to implement a rural small business 5 5 transfer linked investment loan program tofurther the5 6following purposes:5 7a. To promote the business prosperity and economic welfare5 8of Iowa through promoting the prosperity and economic welfare5 9of rural Iowa.5 10b. Tomaintain and expand existing employment 5 11 opportunities and the provision of retail goods on a local 5 12 level in small rural communities by assisting in the transfer 5 13 of ownership of retail-oriented businesses where, in the 5 14 absence of sufficient financial assistance, the businesses may 5 15 close. 5 16 3.Upon the placement of linked investment moneys with an5 17eligible lending institution, the institution is required to5 18lend money to a person pursuant to rules adopted by the5 19treasurer of state for the transfer of a rural small business.5 20TheIn order to qualify as an eligible borrower, the rural 5 21 small business must be located in a city with a population of 5 22 five thousand or less. A city located in a county with a 5 23 population in excess of three hundred thousand, if the city is 5 24 contiguous to another city in the county and that other city 5 25 is contiguous to the largest city in that county, shall be 5 26considered as having a population in excess of five thousand5 27 ineligible to qualify as a borrower. 5 28 4.TheIn order to qualify as an eligible borrower, the 5 29 transfer of the rural small business must be by purchase, 5 30 lease-purchase, or contract of sale. The purchase must be for 5 31 a portion of the business which is essential to its continued 5 32 viability, including real estate where the business is 5 33 located, fixtures attached to the real estate, equipment 5 34 relied upon by the business, and inventory for sale by the 5 35 business. 6 15. The eligible lending institution shall apply all usual6 2lending standards to determine the creditworthiness of each6 3eligible borrower. The lending institution shall forward to6 4the treasurer of state all information or any certification6 5relating to the loan required and in a manner prescribed by6 6this division and rules which shall be adopted by the6 7treasurer of state.6 86.5.AIn order to qualify as an eligible borrower, a 6 9 borrower and the seller of the rural small business shall not 6 10 be within the third degree of consanguinity or affinity. 6 11 6. Loan proceeds shall not be used to refinance existing 6 12 debt, including credit card debt. However, proceeds may be 6 13 used to refinance a short-term bridge loan made in 6 14 anticipation of the treasurer's approval of the linked 6 15 investment loan package. 6 16 7. The maximum loan amount that a borrower may receive 6 17 under this program shallnot be more thanbe fifty thousand 6 18 dollars. 6 198. Not more than one-third of the amount of the percentage6 20authorized in section 12.34 may be used for purposes of6 21supporting this program and the main street linked investment6 22loan program under section 12.51.6 23 Sec. 8. NEW SECTION. 12.41 HORTICULTURAL AND 6 24 NONTRADITIONAL CROPS LINKED INVESTMENT LOAN PROGRAM. 6 25 The treasurer of state shall adopt rules to implement a 6 26 horticultural and nontraditional crops linked investment loan 6 27 program to provide statewide availability of lower cost funds 6 28 for lending that will stimulate existing or encourage new 6 29 businesses in the areas of producing, processing, or marketing 6 30 horticultural or nontraditional crops. The rules shall be in 6 31 accordance with the following: 6 32 1. In order to qualify as an eligible borrower, the loan 6 33 application shall be for the purchase or lease of land, 6 34 machinery, equipment, or the purchase of other inputs used in 6 35 the business of producing, processing, or marketing 7 1 horticultural or nontraditional crops as defined by the 7 2 treasurer. 7 3 2. Loan proceeds shall not be used to refinance existing 7 4 debt, including credit card debt. However, proceeds may be 7 5 used to refinance a short-term bridge loan made in 7 6 anticipation of the treasurer's approval of the linked 7 7 investment loan package. 7 8 3. The maximum loan amount that an eligible borrower may 7 9 receive under this program is two hundred thousand dollars for 7 10 a production loan and five hundred thousand dollars for 7 11 processing or marketing facilities. 7 12 Sec. 9. The treasurer of state shall not place any new 7 13 certificates of deposit for linked investments for the 7 14 targeted small business linked investments program under 7 15 section 12.43 between the effective date of this Act and June 7 16 30, 1997, unless the person for whom the linked investment is 7 17 to be made has been certified by the department of inspections 7 18 and appeals under section 10A.302 and has submitted to the 7 19 treasurer of state a targeted small business borrower 7 20 application by the effective date of this Act. Certificates 7 21 of deposit placed prior to, or following the submission of a 7 22 borrower application by a certified targeted small business by 7 23 the effective date of this Act may be renewed in accordance 7 24 with section 12.34. 7 25 Sec. 10. Certificates of deposit placed prior to the 7 26 effective date of this Act or certificates of deposit placed 7 27 on or after the effective date of this Act for persons who 7 28 were certified under section 12.52 and who have submitted to 7 29 the treasurer of state a main-street borrower application by 7 30 the effective date of this Act, under the main street linked 7 31 investments program may be renewed in accordance with section 7 32 12.34. 7 33 Sec. 11. Sections 12.51 and 12.52, Code 1995, are 7 34 repealed. 7 35 Sec. 12. EFFECTIVE DATE. This Act, being deemed of 8 1 immediate importance, takes effect upon enactment. 8 2 HF 2397 8 3 mk/pk/25
Text: HF02396 Text: HF02398 Text: HF02300 - HF02399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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