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PAG LIN
1 1 HOUSE FILE 722
1 2
1 3 AN ACT
1 4 RELATING TO ESTABLISHING A CAPITAL INVESTMENT BOARD, TAX
1 5 CREDITS, TERMINATION OF THE IOWA SEED CAPITAL CORPORATION,
1 6 ESTABLISHING A CAPITAL TRANSITION BOARD, AND PROVIDING AN
1 7 EFFECTIVE DATE.
1 8
1 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 10
1 11 Section 1. NEW SECTION. 15E.181 PURPOSE.
1 12 The purpose of this division is to enhance the quality of
1 13 life for citizens of the state by encouraging the creation of
1 14 new jobs, industry, products, and wealth through the increased
1 15 availability and accessibility to capital, particularly at the
1 16 seed capital and venture capital investment stages.
1 17 Sec. 2. NEW SECTION. 15E.182 IOWA CAPITAL INVESTMENT
1 18 BOARD.
1 19 1. An Iowa capital investment board is established and
1 20 shall be composed of the following members:
1 21 a. The treasurer of state.
1 22 b. The director of the department.
1 23 c. Three members selected by the governor and confirmed by
1 24 the senate pursuant to section 2.32.
1 25 2. a. The three members selected by the governor shall
1 26 serve six-year staggered terms as determined by the governor.
1 27 A vacancy shall be filled by the governor for the remaining
1 28 portion of the unexpired term. A member is eligible for
1 29 reappointment.
1 30 b. Members of the board are entitled to receive a per diem
1 31 as specified in section 7E.6 for each day spent in performance
1 32 of duties as members and shall be reimbursed for all actual
1 33 and necessary expenses incurred in the performance of duties
1 34 as members.
1 35 c. The board shall annually elect a chairperson from among
2 1 its members.
2 2 3. The Iowa capital investment board shall do the
2 3 following:
2 4 a. Facilitate public and private investment in a series of
2 5 state, regional, or national seed and venture capital funds
2 6 willing to invest in Iowa seed and venture capital
2 7 opportunities. Funds selected for investment must focus on
2 8 economic or industry sectors targeted for development by the
2 9 state. To the extent feasible, priority shall be given to
2 10 state funds before consideration of regional or national
2 11 funds. In selecting funds for investment, the board shall
2 12 seek to maximize benefits which inure to seed and venture
2 13 capital opportunities in Iowa.
2 14 b. Facilitate the creation of a small business investment
2 15 company to maximize the leverage from available federal and
2 16 private sources for investment in seed and venture stage
2 17 companies in the state.
2 18 c. Coordinate with other existing publicly created or
2 19 supported seed and venture investment funds to gain the
2 20 highest investment leverage with the lowest possible
2 21 administrative costs for the state.
2 22 d. Report annually to the governor and the general
2 23 assembly on the investments made pursuant to this division,
2 24 the current and anticipated value of such investments, the
2 25 current and anticipated value of any tax credits given, and
2 26 the estimated current and anticipated impact such investments
2 27 have on the state.
2 28 e. Conduct an annual risk analysis which matches the
2 29 current and anticipated value of investments made pursuant to
2 30 this division with the current and anticipated value of any
2 31 tax credits given. If the anticipated value of any tax
2 32 credits given exceeds the anticipated value of investments,
2 33 the department shall establish a reserve account within the
2 34 strategic investment fund sufficient to cover such losses to
2 35 the general fund of the state in the event of the termination
3 1 of the Iowa capital investment board.
3 2 4. If tax credits are used to facilitate investment
3 3 pursuant to subsection 3, paragraph "a" or "b", the tax
3 4 credits shall only be redeemed for the amount of principal
3 5 invested, and only based on losses at the time of the
3 6 termination or insolvency of the Iowa capital investment
3 7 board.
3 8 5. The general assembly is not obligated to appropriate
3 9 any moneys to pay for any defaults or to appropriate any
3 10 moneys to be credited to the board programs beyond the tax
3 11 credits approved in section 15E.183, and the board in
3 12 administering this section shall not give or lend the credit
3 13 of the state of Iowa.
3 14 6. On or before July 1, 1998, the Iowa capital investment
3 15 board shall select and appoint, through a competitive
3 16 selection process and based on criteria established by the
3 17 board, an executive director to conduct the affairs of the
3 18 board. To the extent feasible, the selection of any fund
3 19 managers, investment advisors, or other consultants shall also
3 20 be through a competitive selection process and based on
3 21 criteria established by the board.
3 22 7. The Iowa capital investment board shall adopt
3 23 procedures, policies, and rules pursuant to chapter 17A, and
3 24 other administrative measures necessary to carry out the
3 25 purpose of this division and administer the programs and
3 26 business of the board.
3 27 Sec. 3. NEW SECTION. 15E.183 TAX CREDITS.
3 28 1. For tax years beginning on or after January 1, 1997,
3 29 there shall be allowed a tax credit against the taxes imposed
3 30 in chapter 422, divisions II and III, for net losses incurred
3 31 by the Iowa capital investment board. The aggregate amount of
3 32 tax credits issued under this section shall not exceed thirty
3 33 million dollars. An individual may claim the credit of a
3 34 partnership, limited liability company, subchapter S
3 35 corporation, estate, or trust electing to have the income
4 1 taxed directly to the individual. The amount claimed by the
4 2 individual shall be based upon the pro rata share of the
4 3 individual's earnings from the partnership, limited liability
4 4 company, subchapter S corporation, estate, or trust. A
4 5 taxpayer shall not claim tax credits under this section which
4 6 exceed the total amount invested by the taxpayer in the Iowa
4 7 capital investment board. Any tax credit in excess of the
4 8 taxpayer's liability for the tax year may be credited to the
4 9 tax liability for the following three years or until depleted,
4 10 whichever is earlier. A tax credit shall not be carried back
4 11 to the tax year prior to the tax year in which the termination
4 12 or insolvency of the Iowa capital investment board occurs. A
4 13 tax credit shall not be refunded.
4 14 a. The Iowa capital investment board shall furnish to each
4 15 person making an investment in the Iowa capital investment
4 16 board during the preceding year a written statement showing
4 17 the name of the investor, taxpayer identification number, the
4 18 total amount of investment in the Iowa capital investment
4 19 board made by such person, and such other information as the
4 20 director of revenue and finance may require. The statement
4 21 shall be attached to the income tax return of such person in
4 22 order to qualify for the tax credit.
4 23 b. The taxpayer making the original investment in the Iowa
4 24 capital investment board may, during the year of the
4 25 termination or insolvency of the Iowa capital investment board
4 26 or during the three years following such termination or
4 27 insolvency, transfer any unused tax credit to another taxpayer
4 28 who may use the tax credit against the taxes imposed under
4 29 chapter 422, divisions II and III, for any tax year the
4 30 original investor could have claimed the tax credit.
4 31 2. The department of revenue and finance shall, in
4 32 consultation with the Iowa capital transition board, develop a
4 33 system for the registration, issuance, transfer, or redemption
4 34 of tax credits issued by the state under this section. The
4 35 department shall also, in consultation with the Iowa capital
5 1 transition board, adopt any other policies, procedures, or
5 2 rules pursuant to chapter 17A necessary for the administration
5 3 of tax credits issued by the state under this section.
5 4 Sec. 4. NEW SECTION. 15E.184 SUPPORT.
5 5 The department shall provide staff assistance, physical
5 6 facilities, and other support as necessary.
5 7 Sec. 5. TERMINATION OF THE IOWA SEED CAPITAL CORPORATION.
5 8 On or before June 30, 1998, the board of directors of the Iowa
5 9 seed capital corporation shall wind up the affairs of the
5 10 corporation, including the transfer of remaining assets and
5 11 liabilities to the Iowa capital investment board, termination
5 12 of staff, and dissolution of the corporation. In the event
5 13 that the remaining assets and liabilities cannot be
5 14 transferred to the Iowa capital investment board, the board of
5 15 directors of the Iowa seed capital corporation shall liquidate
5 16 all assets, settle existing liabilities, and transfer
5 17 remaining moneys to the general fund of the state.
5 18 Sec. 6. IOWA CAPITAL TRANSITION BOARD.
5 19 1. The Iowa capital transition board is created to
5 20 coordinate the transition from the state's present seed and
5 21 venture capital activity to the opportunities provided by the
5 22 Iowa capital investment board.
5 23 2. The membership on the Iowa capital transition board
5 24 shall consist of all of the following members:
5 25 a. The treasurer of state.
5 26 b. The director of the department.
5 27 c. The director of the department of personnel.
5 28 d. The chairperson of the board of directors of the Iowa
5 29 seed capital corporation.
5 30 e. Three other private citizen members selected by a
5 31 majority of the Iowa capital transition board members
5 32 designated in paragraphs "a" through "d". Selection shall be
5 33 based on established experience, expertise, and background in
5 34 the areas of venture capital investments, entrepreneurial
5 35 businesses, and seed and venture capital issues in general.
6 1 3. The Iowa capital transition board shall select a
6 2 chairperson from among its members once all of the members of
6 3 the board have been selected.
6 4 4. The duties of the Iowa capital transition board shall
6 5 include, but are not limited to, the following:
6 6 a. Advise and consult with the department of revenue and
6 7 finance in the development of the capital tax credits system.
6 8 b. Advise and consult with the board of directors of the
6 9 Iowa seed capital corporation in the transition of Iowa seed
6 10 capital corporation assets and liabilities to the Iowa capital
6 11 investment board.
6 12 c. Advise and consult with the board of directors of the
6 13 department of economic development on the coordination of
6 14 existing department financial assistance programs with the
6 15 seed and venture capital opportunities provided by this
6 16 division.
6 17 d. Provide recommendations to the Iowa capital investment
6 18 board regarding the carrying out of the Iowa capital
6 19 investment board's duties.
6 20 5. The department of economic development shall provide
6 21 the board with staff assistance, physical facilities, and
6 22 other support as necessary.
6 23 6. The existence of the Iowa capital transition board
6 24 shall be terminated on July 1, 1998, unless the board is
6 25 terminated at an earlier time by a majority vote of the
6 26 members.
6 27 Sec. 7. EFFECTIVE DATE. This Act, being deemed of
6 28 immediate importance, takes effect upon enactment.
6 29
6 30
6 31
6 32 RON J. CORBETT
6 33 Speaker of the House
6 34
6 35
7 1
7 2 MARY E. KRAMER
7 3 President of the Senate
7 4
7 5 I hereby certify that this bill originated in the House and
7 6 is known as House File 722, Seventy-seventh General Assembly.
7 7
7 8
7 9
7 10 ELIZABETH ISAACSON
7 11 Chief Clerk of the House
7 12 Approved , 1997
7 13
7 14
7 15
7 16 TERRY E. BRANSTAD
7 17 Governor
Text: HF00721 Text: HF00723 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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