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House File 613

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Bill Text

PAG LIN
  1  1                                            HOUSE FILE 613
  1  2 
  1  3                             AN ACT
  1  4 RELATING TO LINKED DEPOSIT INVESTMENT PROGRAMS.
  1  5 
  1  6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 
  1  7 
  1  8    Section 1.  Section 12.32, subsection 1, Code 1997, is
  1  9 amended to read as follows:
  1 10    1.  "Eligible borrower" means any person who is in the
  1 11 business or is entering the business of producing, processing,
  1 12 or marketing horticultural crops or nontraditional crops in
  1 13 this state or any person in this state who is qualified to
  1 14 participate in one of the programs in this division.
  1 15 "Eligible borrower" does not include a person who has been
  1 16 determined to be delinquent in making child support payments
  1 17 or any other payments due the state.
  1 18    Sec. 2.  Section 12.32, subsection 3, Code 1997, is amended
  1 19 to read as follows:
  1 20    3.  "Linked investment" means a certificate of deposit
  1 21 placed pursuant to this division by the treasurer of state
  1 22 with an eligible lending institution, at an interest rate not
  1 23 more than three percent below current market rates rate on the
  1 24 condition that the institution agrees to lend the value of the
  1 25 deposit, according to the investment agreement provided in
  1 26 section 12.35, to an eligible borrower at a rate not to exceed
  1 27 four percent above the rate paid on the certificate of
  1 28 deposit.  The treasurer of state shall determine and make
  1 29 available the current market rate which shall be used each
  1 30 month.
  1 31    Sec. 3.  Section 12.33, Code 1997, is amended to read as
  1 32 follows:
  1 33    12.33  LEGISLATIVE FINDINGS AND INTENT – PURPOSE PUBLIC
  1 34 POLICY.
  1 35    1.  The general assembly finds the following:
  2  1    a.  That many horticultural operations throughout the state
  2  2 are experiencing economic stagnation or decline.
  2  3    b.  That high interest rates have caused potentially viable
  2  4 operations to cease or not expand in the area of horticultural
  2  5 or nontraditional crop production, processing, or marketing.
  2  6    2.  The It is the public policy of this state that a linked
  2  7 investments for tomorrow program provided for in this division
  2  8 is intended be established to provide statewide availability
  2  9 of lower cost funds for lending purposes that will inject
  2 10 needed capital into the business of, and stimulate existing or
  2 11 encourage new businesses in, the area of producing,
  2 12 processing, or marketing horticultural or nontraditional
  2 13 crops.
  2 14    3.  It is the public policy of the state through the linked
  2 15 investments for tomorrow program to create an availability of
  2 16 lower cost funds to inject needed capital into the business of
  2 17 producing, processing, or marketing horticultural crops or
  2 18 nontraditional crops.
  2 19    Sec. 4.  Section 12.34, subsection 1, Code 1997, is amended
  2 20 to read as follows:
  2 21    1.  The treasurer of state may invest up to the lesser of
  2 22 sixty-eight million dollars or ten percent of the balance of
  2 23 the state pooled money fund in certificates of deposit in
  2 24 eligible lending institutions pursuant to this division.
  2 25    Sec. 5.  Section 12.40, subsection 3, Code 1997, is amended
  2 26 to read as follows:
  2 27    3.  In order to qualify as an eligible borrower, the rural
  2 28 small business must be located in a city with a population of
  2 29 five thousand or less.  A rural small business located in a
  2 30 city located in a county with a population in excess of three
  2 31 hundred thousand, if the city is contiguous to another city in
  2 32 the county and that other city is contiguous to the largest
  2 33 city in that county, shall be ineligible to qualify as a
  2 34 borrower.  In order to qualify under this program, all owners
  2 35 of the business or borrowers must not have a combined net
  3  1 worth exceeding five hundred thousand dollars as defined in
  3  2 rules adopted by the treasurer of state pursuant to chapter
  3  3 17A and the rural small business must meet all of the
  3  4 following criteria:
  3  5    a.  Be a for-profit business.
  3  6    b.  Have annual sales of two million dollars or less.
  3  7    c.  Not be operated out of the home of any person, unless
  3  8 the person is eligible for a deduction on federal income taxes
  3  9 pursuant to 26 U.S.C. } 280A.
  3 10    d.  Not involve real estate investments, rental of real
  3 11 estate, leasing of real estate, or real estate speculation.
  3 12    e.  Liquor, beer, and wine sales must not exceed twenty
  3 13 percent of annual sales for establishments holding a class "C"
  3 14 liquor license issued pursuant to section 123.30.
  3 15    Sec. 6.  Section 12.40, subsection 4, Code 1997, is amended
  3 16 to read as follows:
  3 17    4.  In order to qualify as an eligible borrower, the
  3 18 transfer of the rural small business must be by purchase,
  3 19 lease-purchase, or contract of sale.  The purchase must be for
  3 20 a portion of the business which is essential to its continued
  3 21 viability, including real estate where the business is
  3 22 located, fixtures attached to the real estate, equipment,
  3 23 supplies, and machinery relied upon by the business, and
  3 24 inventory for sale by the business.
  3 25    Sec. 7.  Section 12.40, subsection 7, Code 1997, is amended
  3 26 to read as follows:
  3 27    7.  The During the lifetime of this loan program, the
  3 28 maximum loan amount of assistance that a an eligible borrower
  3 29 or a business may receive under through this loan program
  3 30 shall be fifty thousand dollars.
  3 31    Sec. 8.  Section 12.41, subsection 1, Code 1997, is amended
  3 32 to read as follows:
  3 33    1.  In order to qualify as an eligible borrower, the loan
  3 34 application shall must be for the purchase or lease of land,
  3 35 machinery, equipment, or the purchase of other inputs used in
  4  1 the business of producing, processing, or marketing
  4  2 horticultural or nontraditional crops as defined in rules
  4  3 adopted by the treasurer.
  4  4    Sec. 9.  Section 12.43, Code 1997, is amended to read as
  4  5 follows:
  4  6    12.43  TARGETED FOCUSED SMALL BUSINESS LINKED INVESTMENTS
  4  7 PROGRAM CREATED – DEFINITIONS.
  4  8    The treasurer of state shall adopt rules to implement a
  4  9 targeted focused small business linked investments program to
  4 10 increase the availability of lower cost funds to inject needed
  4 11 capital into small businesses owned and operated by women or
  4 12 minorities, which is the public policy of the state.  The
  4 13 rules shall be in accordance with the following:
  4 14    1.  "Targeted small business" means a business as defined
  4 15 in section 15.102, subsection 5.
  4 16    2.  A linked investment shall only be approved in
  4 17 connection with a loan application for a targeted small
  4 18 business which has been certified pursuant to section 10A.104,
  4 19 subsection 8.
  4 20    1.  As used in this section:
  4 21    a.  "Focused small business" means a new small business
  4 22 which is fifty-one percent or more owned, operated, and
  4 23 actively managed by one or more women, minority persons, or
  4 24 persons with a disability, provided the business meets all the
  4 25 requirements of subsection 5.
  4 26    b.  "Disability" is defined as provided in section 15.102,
  4 27 subsection 5.
  4 28    c.  "Major life activity" is defined as provided in section
  4 29 15.102, subsection 5.
  4 30    d.  "Minority person" is defined as provided in section
  4 31 15.102, subsection 5.
  4 32    3. 2.  Loan applications for a targeted focused small
  4 33 business shall be for the purchase of land, machinery,
  4 34 equipment, or licenses, or patent, trademark, or copyright
  4 35 fees and expenses.
  5  1    4. 3.  The During the lifetime of this loan program, the
  5  2 maximum size of a targeted small business loan is two amount
  5  3 of assistance that an eligible borrower or business may borrow
  5  4 or receive through this loan program shall be one hundred
  5  5 fifty thousand dollars per borrower.  An eligible borrower or
  5  6 business under this program shall be limited to one loan from
  5  7 one financial institution.
  5  8    5. 4.  A preference shall be given to those persons who are
  5  9 less able than other persons to secure funds for a targeted
  5 10 focused small business without participation in the targeted
  5 11 focused small business linked investment program.
  5 12    5.  In order to qualify under this program, all owners of
  5 13 the business or borrowers must not have a combined net worth
  5 14 exceeding five hundred thousand dollars as defined in rules
  5 15 adopted by the treasurer of state pursuant to chapter 17A and
  5 16 the focused small business must meet all of the following
  5 17 criteria:
  5 18    a.  Be a for-profit business.
  5 19    b.  Have annual sales of two million dollars or less.
  5 20    c.  Not be operated out of the home of any person, unless
  5 21 the person is eligible for a deduction on federal income taxes
  5 22 pursuant to 26 U.S.C. } 280A.
  5 23    d.  Not involve real estate investments, rental of real
  5 24 estate, leasing of real estate, or real estate speculation.
  5 25    e.  Liquor, beer, and wine sales must not exceed twenty
  5 26 percent of annual sales for establishments holding a class "C"
  5 27 liquor license issued pursuant to section 123.30.
  5 28    6.  Loan proceeds shall not be used to refinance existing
  5 29 debt, including credit card debt.  However, proceeds may be
  5 30 used to refinance a short-term bridge loan made in
  5 31 anticipation of the treasurer of state's approval of the
  5 32 linked investment loan package.
  5 33    7.  Eligible lending institutions shall verify the borrower
  5 34 is eligible to participate under the provisions of this
  5 35 section pursuant to rules adopted by the treasurer of state
  6  1 pursuant to chapter 17A.
  6  2    Sec. 10.  This Act shall have no effect, pursuant to
  6  3 section 4.13, on loans in effect on the effective date of this
  6  4 Act.
  6  5    Sec. 11.  In addition to the assistance already available
  6  6 through the department of economic development's targeted
  6  7 small business program, the department of economic development
  6  8 shall develop a proposal for "instant buy down" assistance to
  6  9 targeted small businesses.  The department of economic
  6 10 development shall provide a recommended proposal for this type
  6 11 of assistance and an estimate of necessary additional funding
  6 12 for such assistance to the chairpersons of the economic
  6 13 development appropriation subcommittees of the general
  6 14 assembly by December 15, 1997.  
  6 15 
  6 16 
  6 17                                                             
  6 18                               RON J. CORBETT
  6 19                               Speaker of the House
  6 20 
  6 21 
  6 22                                                             
  6 23                               MARY E. KRAMER
  6 24                               President of the Senate
  6 25 
  6 26    I hereby certify that this bill originated in the House and
  6 27 is known as House File 613, Seventy-seventh General Assembly.
  6 28 
  6 29 
  6 30                                                             
  6 31                               ELIZABETH ISAACSON
  6 32                               Chief Clerk of the House
  6 33 Approved                , 1997
  6 34 
  6 35 
  7  1                         
  7  2 TERRY E. BRANSTAD
  7  3 Governor
     
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