Text: HSB00693 Text: HSB00695 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 15.343, subsection 1, paragraph c, 1 2 unnumbered paragraph 1, Code Supplement 1995, is amended to 1 3 read as follows: 1 4 Repayment moneys pursuant to section 422.16A, up to a1 5maximum of two million dollars each year. 1 6 Sec. 2. Section 15.343, subsection 1, Code Supplement 1 7 1995, is amended by adding the following new paragraph: 1 8 NEW PARAGRAPH. d. The innovative skill development 1 9 account created in section 15.349. 1 10 Sec. 3. NEW SECTION. 15.349 INNOVATIVE SKILL DEVELOPMENT 1 11 ACCOUNT. 1 12 An innovative skill development account is created within 1 13 the workforce development fund to be used by the department to 1 14 support innovative skill development training for Iowa 1 15 businesses. Training to be funded shall include but is not 1 16 limited to business network training programs, innovative 1 17 apprenticeship programs for emerging industries, and critical 1 18 skill training for industries experiencing labor shortages. 1 19 The department shall adopt rules governing the operation of 1 20 and eligibility for participation beginning July 1, 1996, in 1 21 the account. 1 22 Sec. 4. Section 15E.112, subsection 1, Code 1995, is 1 23 amended to read as follows: 1 24 1. A value-added agricultural products and processes 1 25 financial assistance fund is created within the state treasury 1 26 under the control of the department. The fund shall consist 1 27 of any money appropriated by the general assembly and any 1 28 other moneys available to and obtained or accepted by the 1 29 department from the federal government or private sources for 1 30 placement in the fund. Until July 1, 2000, moneys shall be 1 31 deposited in the fund as provided in section 423.24. Not more 1 32 thanonefour percent of the total moneys available to support 1 33 value-added agricultural products and processes pursuant to 1 34 section 423.24 during each quarter shall be used by the 1 35 department for administration of the value-added agricultural 2 1 products and processes financial assistance program, as 2 2 provided in section 15E.111. The assets of the fund shall be 2 3 used by the department only for carrying out the purposes of 2 4 section 15E.111. 2 5 Sec. 5. NEW SECTION. 15E.113 MICROBUSINESS RURAL 2 6 ENTERPRISE ASSISTANCE. 2 7 1. As used in this section: 2 8 a. "Department" means the department of economic 2 9 development. 2 10 b. "Microbusiness" or "microbusiness enterprise" means a 2 11 business producing services with five or fewer full-time 2 12 equivalent employee positions and with assistance requirements 2 13 of not more than twenty-five thousand dollars. 2 14 c. "Microbusiness organization" means a nonprofit 2 15 corporation organized under chapter 504A which is exempt from 2 16 taxation pursuant to section 501(c) of the Internal Revenue 2 17 Code and which has a principal mission of actively engaging in 2 18 microbusiness development, training, technical assistance, and 2 19 capital access for the start-up or expansion of 2 20 microbusinesses. 2 21 2. The department may allocate from the value-added 2 22 agricultural products and processes financial assistance fund 2 23 an amount equal to one and one-quarter percent of the total 2 24 moneys used to support value-added agricultural products and 2 25 processes as provided in section 423.24 during each quarter to 2 26 be used for the purpose of conducting a microbusiness rural 2 27 enterprise assistance program. 2 28 3. The department may contract with a microenterprise 2 29 organization actively engaged in microbusiness enterprise to 2 30 assist in the establishment of this program. In order to 2 31 qualify for the contract, the microenterprise organization 2 32 shall do all of the following: 2 33 a. Demonstrate a past performance of and a capacity to 2 34 successfully engage in microbusiness development. 2 35 b. Have a statewide commitment to and focus on 3 1 microbusiness development. 3 2 c. Provide training and technical assistance. 3 3 d. Demonstrate an ability to provide access to capital for 3 4 start-up or expansion of a microbusiness. 3 5 e. Have established linkages with financial institutions. 3 6 f. Demonstrate an ability to provide follow-up technical 3 7 assistance after a microbusiness start-up or expansion. 3 8 4. Moneys allocated pursuant to this section which remain 3 9 unexpended or unobligated at the end of a fiscal year shall 3 10 remain available to the department to support the assistance 3 11 program or may be credited to the value-added agricultural 3 12 products and processes financial assistance fund created in 3 13 section 15E.112 and shall not revert notwithstanding section 3 14 8.33. 3 15 5. The department shall submit a report in accordance with 3 16 section 7A.11 not later than November 1 of each year detailing 3 17 the activities of the microenterprise organization and 3 18 describing the success of the project. 3 19 Sec. 6. Section 260F.1, Code 1995, is amended to read as 3 20 follows: 3 21 260F.1 TITLE. 3 22 This chapter shall be known and may be cited as the "Iowa 3 23small business newjobs training Act". 3 24 Sec. 7. Section 260F.2, Code 1995, is amended to read as 3 25 follows: 3 26 260F.2 DEFINITIONS. 3 27 When used in this chapter, unless the context otherwise 3 28 requires: 3 29 1. "Agreement" is the agreement between a business and a 3 30 community college concerning a project. 3 312. "Board of directors" means the board of directors of a3 32community college.3 333.2. "Community college" means a community college 3 34 established under chapter 260C. 3 354.3. "Date of commencement of the project" means the date 4 1 of the preliminary agreement or the date an application for 4 2 assistance is received by the department. 4 3 4. "Department" means the department of economic 4 4 development. 4 5 5. "Eligible business" or "business" means a business 4 6 training employees which is engaged in interstate or 4 7 intrastate commerce for the purpose of manufacturing, 4 8 processing, or assembling products, conducting research and 4 9 development, or providing services in interstate commerce, but 4 10 excludes retail, health, or professional services and which 4 11 meets the other criteria established by theIowadepartmentof4 12economic development."Eligible business" does not include a4 13business which closes or substantially reduces its operation4 14in one area of the state of Iowa and relocates substantially4 15the same operation in another area of the state of Iowa. This4 16subsection does not prohibit a business from expanding its4 17operations in another area of the state provided that existing4 18operations of a similar nature are not closed or substantially4 19reduced. "Small"Eligible business" does not include a 4 20 business whose training costs can be economically funded under 4 21 chapter 260E, a business which closes or reduces its 4 22 employment base by twenty-five percent or more in order to 4 23 relocate substantially the same operation to another area, or 4 24 a business which is involved in a strike, lockout, or other 4 25 labor dispute. 4 26"Eligible business" includes the following:4 27a. Retraining business which is currently conducting4 28retooling of a production facility.4 29b. Small business which meets other criteria established4 30by the department of economic development relating to business4 31size.4 32 6. "Employee" meansthe person employed in a new job by a4 33small business ora person currently employed by a business 4 34 who is to beretrainedtrained. However, "employee" does not 4 35 include replacement workers who are hired as a result of a 5 1 strike, lockout, or other labor dispute. 5 27. "Incremental property taxes" means the taxes as5 3provided in section 260F.4.5 48.7. "Jobs training program" or "program" means the 5 5 project or projects established by a community college for the 5 6creation of jobs by providing education and training of5 7workers for new jobs for a new or expanding small business or5 8for the retraining of workers of an existing businesstraining 5 9 of employees. 5 109. "New job" means a job in a new or expanding small5 11business but does not include jobs of recalled workers, or5 12replacement jobs or other jobs that formerly existed in the5 13small business in the state of Iowa.5 1410. "New jobs credit from withholding" means the credit as5 15provided in section 260F.5.5 1611.8. "Participating business" meansthe small business5 17providing new jobs or retraining jobs anda business training 5 18 employees which enters into an agreement with the community 5 19 college. 5 2012.9. "Program costs" means all necessary and incidental 5 21 costs of providing program services. 5 2213.10. "Program services" includes but is not limited to 5 23 the following: 5 24a. New jobs training.5 25b.a.RetrainingTraining ofexisting workersemployees. 5 26c.b. Adult basic education and job-related instruction. 5 27d.c. Vocational and skill-assessment services and 5 28 testing. 5 29e.d. Training facilities, equipment, materials, and 5 30 supplies. 5 31f. On-the-job training.5 32g.e. Administrative expenses for the jobs training 5 33 program. 5 34h.f. Subcontracted services with institutions governed by 5 35 the state board of regents, private colleges or universities, 6 1 or other federal, state, or local agencies. 6 2i.g. Contracted or professional services. 6 314.11. "Project" means a training arrangement which is 6 4 the subject of an agreement entered into between the community 6 5 college and a business to provide program services. 6 615. "Retooling" means upgrading, modernizing, or expanding6 7a business to increase the production or efficiency of6 8business operations including, but not limited to, replacing6 9equipment, introducing new manufacturing processes, or6 10changing managerial procedures.6 1116. "Retraining job" means a job with an existing business6 12that is substantially at risk of becoming displaced within the6 13following ten years due to the retooling of the business.6 14 Sec. 8. Section 260F.3, Code 1995, is amended by striking 6 15 the section and inserting in lieu thereof the following: 6 16 260F.3 AGREEMENT. 6 17 A community college may enter into an agreement to 6 18 establish a project. An agreement shall provide for, but is 6 19 not limited to, the following: 6 20 1. Date of agreement. 6 21 2. Anticipated number of employees to be trained. 6 22 3. Estimated cost of training. 6 23 4. Anticipated dates of commencement and termination of 6 24 training. 6 25 5. Other criteria established by the department. 6 26 Sec. 9. Section 260F.6, subsection 2, Code Supplement 6 27 1995, is amended to read as follows: 6 28 2. To provide funds for the present payment of the costs 6 29 of a training program by the business, the community college 6 30 may provide to the business an advance of the moneys to be 6 31 used to pay for the program costs as provided in the 6 32 agreement. To receive the funds for this advance from the job 6 33 training fund established in subsection 1, the community 6 34 college shall submit an application to the department of 6 35 economic development. The amount of the advance shall not 7 1 exceedfiftytwenty-five thousand dollars for anyproject7 2 business site, or fifty thousand dollars within a three- 7 3 fiscal-year period for any business site.The advance, if the7 4agreement provides it as a loan, shall be repaid with interest7 5from the sources provided in the agreement. The rate of7 6interest to be charged for advances made in a calendar month7 7is equal to one-half of the average rate of interest on tax7 8exempt certificates issued by community colleges pursuant to7 9chapter 260E for the previous twelve months. The rate shall7 10be computed by the department of economic development.If the 7 11 project involves a consortium of businesses, the maximum award 7 12 per project shall not exceed fifty thousand dollars. 7 13 Participation in a consortium does not affect a business 7 14 site's eligibility for individual project assistance. Prior 7 15 to approval a business shall agree to match program amounts in 7 16 accordance with criteria established by the department. 7 17 Sec. 10. NEW SECTION. 260F.6A BUSINESS NETWORK TRAINING. 7 18 The community colleges and the department are authorized to 7 19 fund business network training projects which include five or 7 20 more businesses and are located in three or more contiguous 7 21 community college districts or two or more noncontiguous 7 22 community college districts. The community colleges shall use 7 23 their allocations provided for in this chapter to fund 7 24 projects under this section. A business network training 7 25 project must have a designated organization or lead business 7 26 to serve as the administrative entity that will coordinate the 7 27 training program. The businesses must have common training 7 28 needs and develop a plan to meet those needs. The department 7 29 shall adopt rules governing this section's operation and 7 30 participant eligibility. 7 31 Sec. 11. Section 260F.7, Code 1995, is amended to read as 7 32 follows: 7 33 260F.7 DEPARTMENT OF ECONOMIC DEVELOPMENT TO COORDINATE. 7 34 The department of economic development, in consultation 7 35 with the department of education and the division of job 8 1 service of the department of employment services, shall 8 2 coordinate the jobs training program. A project shall not be 8 3 funded under this chapter unless the department of economic 8 4 development approves the project. The departmentof economic8 5developmentshall adopt rules pursuant to chapter 17Athat the8 6community college will use in developing projects with new and8 7expanding small business new jobs training proposals or8 8existing business retraining proposalsgoverning the program's 8 9 operation and eligibility for participation in the program. 8 10 The department shall establish by rule criteria for 8 11 determining what constitutes an eligible business.A project8 12shall not be funded under this chapter unless the department8 13approves the project. The department shall establish by rule8 14criteria for approval of projects. The department may adopt8 15any rule effective immediately upon filing with the8 16administrative rules coordinator or at a subsequent stated8 17date prior to indexing and publication, or at a stated date8 18less than thirty-five days after filing, indexing, and8 19publication. The department of economic development shall8 20prepare an annual report for the governor and general assembly8 21on the activities and the future anticipated needs of this8 22jobs training program.8 23 Sec. 12. Section 260F.8, Code 1995, is amended to read as 8 24 follows: 8 25 260F.8 ALLOCATION. 8 26 1. Fortheeach fiscal yearbeginning July 1, 1992, and8 27subsequent years, the departmentof economic developmentshall 8 28 make funds available to the community colleges. The 8 29 department shall allocate by formulaat the beginning of the8 30fiscal yearfrom the moneys in the fund an amount for each 8 31merged areacommunity college to be used to provide the 8 32 financial assistance for proposals of businesseslocated in8 33the merged areawhose applications have been approved by the 8 34 department. The financial assistance shall be provided by the 8 35 department from the amount set aside for thatmerged area9 1 community college. If any portion of the moneys set aside for 9 2 amerged areacommunity college have not been used or 9 3 committed byMarchMay 1 of the fiscal year, that portion is 9 4 available for use by the department to provide financial 9 5 assistance to businesses located in othermerged areas9 6 community colleges. The department shall adopt by rule a 9 7 formula for this set-asidebased on population and per capita9 8income of the merged area. 9 9 2. Moneys available to the community colleges for this 9 10 program may be used to providegrantsforgivable loans to 9 11 trainfor new jobs or retain existing jobs when the project9 12costs are less than five thousand dollarsemployees.If the9 13project is for a consortium of businesses, project costs shall9 14not exceed an average of five thousand dollars per business.9 15 Sec. 13. Section 403.19, subsection 1, paragraph c, Code 9 16 1995, is amended to read as follows: 9 17 c. For the purposes of dividing taxes undersections9 18 section 260E.4and 260F.4, the applicable assessment roll for 9 19 purposes of paragraph "a" shall be the assessment roll as of 9 20 January 1 of the calendar year preceding the first written 9 21 agreement providing that all or a portion of program costs are 9 22 to be paid for by incremental property taxes. The community 9 23 college shall file a copy of the agreement with the 9 24 appropriate assessor. The assessor may, within fourteen days 9 25 of such filing, physically inspect the applicable taxable 9 26 business property. If upon such inspection the assessor 9 27 determines that there has been a change in the value of the 9 28 property from the value as shown on the assessment roll as of 9 29 January 1 of the calendar year preceding the filing of the 9 30 agreement and such change in value is due to new construction, 9 31 additions or improvements to existing structures, or 9 32 remodeling of existing structures for which a building permit 9 33 was required, the assessor shall promptly determine the value 9 34 of the property as of the inspection in the manner provided in 9 35 chapter 441 and that value shall be included for purposes of 10 1 the jobs training project in the assessed value of the 10 2 employer's taxable business property as shown on the 10 3 assessment roll as of January 1 of the calendar year preceding 10 4 the filing of the agreement. The assessor, within thirty days 10 5 of such filing, shall notify the community college and the 10 6 employer or business of that valuation which shall be included 10 7 in the assessed valuation for purposes of this subsection and 10 8 section 260E.4or 260F.4. The value determined by the 10 9 assessor shall reflect the change in value due solely to new 10 10 construction, additions or improvements to existing 10 11 structures, or remodeling of existing structures for which a 10 12 building permit was required. 10 13 Sec. 14. Section 422.16A, Code Supplement 1995, is amended 10 14 to read as follows: 10 15 422.16A JOB TRAINING WITHHOLDING – CERTIFICATION AND 10 16 TRANSFER. 10 17 Upon payment in full of a certificate of participation or 10 18 other obligation issued to fund a job training program under 10 19 chapter 260E, the community college providing the job training 10 20 program shall notify the department of economic development of 10 21 the amount paid by the employer or business to the community 10 22 college to retire the certificate during thepreviouslast 10 23 twelve months of withholding collections. The department of 10 24 economic development shall notify the department of revenue 10 25 and finance of that amount. The department shall credit to 10 26 the workforce development fund established in section 15.343 10 27 twenty-five percent of that amount each quarter for a period 10 28 of ten years. If the amount of withholding from the business 10 29 or employer is insufficient, the department shall prorate the 10 30 quarterly amount credited to the workforce development fund. 10 31The maximum amount from all employers which shall be10 32transferred to the workforce development fund in any year is10 33two million dollars.10 34 Sec. 15. Section 427B.17, subsection 7, Code Supplement 10 35 1995, is amended to read as follows: 11 1 7. For the purpose of dividing taxes under section 260E.4 11 2or 260F.4, the employer's or business's valuation of property 11 3 defined in section 427A.1, subsection 1, paragraphs "e" and 11 4 "j", and used to fund a new jobs training project which 11 5 project's first written agreement providing for a division of 11 6 taxes as provided in section 403.19 is approved on or before 11 7 June 30, 1995, shall be limited to thirty percent of the net 11 8 acquisition cost of the property. An employer's or business's 11 9 taxable property used to fund a new jobs training project 11 10 shall not be valued pursuant to subsection 2 or 3, whichever 11 11 is applicable, until the assessment year following the 11 12 calendar year in which the certificates or other funding 11 13 obligations have been retired or escrowed. The taxpayer's 11 14 valuation for such property shall then be the valuation 11 15 specified in subsection 1 for the applicable assessment year. 11 16 If the certificates issued, or other funding obligations 11 17 incurred, between January 1, 1982, and June 30, 1995, are 11 18 refinanced or refunded after June 30, 1995, the valuation of 11 19 such property shall then be the valuation specified in 11 20 subsection 2 or 3, whichever is applicable, for the applicable 11 21 assessment year beginning with the assessment year following 11 22 the calendar year in which those certificates or other funding 11 23 obligations are refinanced or refunded after June 30, 1995. 11 24 Sec. 16. 1995 Iowa Acts, chapter 184, section 12, is 11 25 repealed. 11 26 Sec. 17. REPEALS. Sections 260F.4 and 260F.5, Code 1995, 11 27 are repealed. 11 28 EXPLANATION 11 29 This bill makes changes and additions to department of 11 30 economic development programs. The bill provides as follows: 11 31 Sections 15.343 and 422.16A are amended to remove the $2 11 32 million per year cap on the amount which can be transferred 11 33 into the workforce development fund from employer withholding 11 34 amounts previously used to retire job training program 11 35 certificates under chapter 260E. The bill also repeals the 12 1 provisions enacted as part of House File 573 in 1995 which 12 2 sunset the workforce development fund program in 1997. 12 3 The bill creates an innovative skill development account to 12 4 the workforce development fund program. Moneys in the account 12 5 shall be used to fund business network training and other 12 6 innovative skill development training for Iowa businesses. 12 7 Section 15E.112 is amended to provide that not more than 12 8 four percent (currently one percent) of the total moneys 12 9 available to the support value-added agricultural products and 12 10 processes program during each quarter may be used for 12 11 administration of the program. The bill also provides that 12 12 one and one-quarter percent of the moneys available for the 12 13 value-added agricultural products and processes program during 12 14 each quarter may be used to fund a microbusiness rural 12 15 enterprise assistance program. 12 16 New section 15E.113 provides that the department may 12 17 contract with a microbusinesses organization which meets 12 18 certain criteria, including a track record of assistance to 12 19 microbusinesses, to establish a program of assistance to rural 12 20 microbusinesses. Microbusinesses are defined by the bill as 12 21 service businesses employing five or fewer full-time 12 22 equivalent employees with the need for up to $25,000 in 12 23 assistance. The department is to report to the general 12 24 assembly regarding the activities of the program. Further, 12 25 moneys allocated to the program are not to revert to the 12 26 general fund. 12 27 The bill renames chapter 260F the Iowa jobs training Act 12 28 and makes several changes to the chapter including the 12 29 following: 12 30 1. Businesses which are eligible for assistance are those 12 31 which are currently training existing employees, rather than 12 32 employees in new jobs. The bill provides that a business is 12 33 ineligible for assistance if the business is involved in a 12 34 strike, lockout, or other labor dispute and that program funds 12 35 shall not be used to train replacement workers hired as part 13 1 of a labor dispute. 13 2 2. The bill eliminates the tax increment financing 13 3 provisions currently used to provide program funds under the 13 4 chapter. The new jobs credit from withholding is also 13 5 eliminated. This provision allowed 1.50 percent of the gross 13 6 wages paid to each employee in a new job training project to 13 7 be credited to the cost of the training project. The 13 8 department of economic development shall allocate funds for 13 9 projects under the chapter. 13 10 3. The bill also provides for training of groups of 13 11 businesses and for providing a maximum amount of assistance 13 12 for businesses participating in training under chapter 260F 13 13 would be $25,000 per business with a cap of $50,000 per three- 13 14 year period. 13 15 BACKGROUND STATEMENT 13 16 SUBMITTED BY THE AGENCY 13 17 One of the highest priorities of the Iowa department of 13 18 economic development (IDED) is to remove the restrictive 13 19 funding cap and lift the sunset provision from the original 13 20 enabling language for the workforce development fund. Prior 13 21 to the passage of this legislation, workforce development 13 22 activities in Iowa were fragmented and did not reflect a 13 23 coherent state policy. Since the establishment of this fund, 13 24 IDED has been successful in integrating the myriad of 13 25 workforce development, job training, retraining, education 13 26 programs, and funding streams which exist throughout state 13 27 government. IDED would like to continue building the 13 28 workforce development fund well beyond 1997 so that there is 13 29 funding available to take the employee training model to the 13 30 next level and past the employee training and retraining 13 31 programs now in place. 13 32 With the implementation of severe federal funding cuts 13 33 looming for workforce development programs in Iowa, the impact 13 34 of lifting the state funding cap for such initiatives will be 13 35 immediate and significant. It will allow planned job training 14 1 and retraining activities to progress uninterrupted and with 14 2 greater certainty, continuing to provide the educational 14 3 opportunities and competitive advantages needed for Iowans to 14 4 succeed in today's difficult job market. 14 5 During 1995, Iowa's business training programs were 14 6 reviewed by both the community college economic developers and 14 7 an appointed job training task force. These two groups 14 8 determined that private dollars could be more effectively 14 9 leveraged and state funding sources more efficiently utilized 14 10 if chapter 260F were to be modified to eliminate the 14 11 withholding and property tax increment financing districts for 14 12 small business new jobs training programs. They recommended 14 13 that chapter 260F dollars be authorized for use to conduct 14 14 consortia training for supplier networks and other industry 14 15 groups, while at the same time doing away with the distinction 14 16 between retraining and new jobs training. Businesses 14 17 participating in such supplier network training programs would 14 18 have a match requirement, with the maximum award to an 14 19 individual business reduced from $50,000 to $25,000 per year 14 20 and a cap of $50,000 within a three-year period established. 14 21 A microbusiness rural enterprise demonstration project was 14 22 funded by the Iowa general assembly in 1994. The results of 14 23 that effort show substantial success. Training and technical 14 24 assistance were provided to over 40 individuals, 10 of whom 14 25 have subsequently started their own small business 14 26 enterprises. This proposed legislation for a microbusiness 14 27 rural enterprise assistance program will allow the success to 14 28 continue and provide training and technical assistance to 14 29 those areas of the state not reached by the original 14 30 demonstration project. 14 31 Diminishing funding sources and increased programming costs 14 32 necessitate the request to increase the amount of 14 33 administration costs which may be covered out of value-added 14 34 agricultural products and processes financial assistance 14 35 program funds. The additional funds will provide for adequate 15 1 administration to continue the success of the program. 15 2 LSB 3417DP 76 15 3 mk/cf/24.2
Text: HSB00693 Text: HSB00695 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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