Text: HSB00209 Text: HSB00211 Text: HSB00200 - HSB00299 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 12.32, Code 1997, 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 "Eligible borrower" does not include a person who has been 1 12 determined to be or becomes delinquent in making child support 1 13 payments or any other payments due the state. 1 14 2. "Eligible lending institution" means a financial 1 15 institution that is empowered to make commercial loans and is 1 16 eligible pursuant to chapter 12C to be a depository of state 1 17 funds. 1 18 3. "Linked investment" means a certificate of deposit 1 19 placed pursuant to this division by the treasurer of state 1 20 with an eligible lending institution, at an interest rate not 1 21 more than three percent below current marketratesrate on the 1 22 condition that the institution agrees to lend the value of the 1 23 deposit, according to the investment agreement provided in 1 24 section 12.35, to an eligible borrower at a rate not to exceed 1 25 four percent above the rate paid on the certificate of 1 26 deposit. The treasurer of state shall determine and make 1 27 available the current market rate which shall be used each 1 28 month. 1 29 Sec. 2. Section 12.33, Code 1997, is amended to read as 1 30 follows: 1 31 12.33LEGISLATIVE FINDINGS AND INTENT – PURPOSEPUBLIC 1 32 POLICY. 1 331. The general assembly finds the following:1 34a. That many horticultural operations throughout the state1 35are experiencing economic stagnation or decline.2 1b. That high interest rates have caused potentially viable2 2operations to cease or not expand in the area of horticultural2 3or nontraditional crop production, processing, or marketing.2 42. TheIt is the public policy of this state that a linked 2 5 investments for tomorrow programprovided for in this division2 6is intendedbe established to provide statewide availability 2 7 of lower cost funds for lending purposes that will inject 2 8 needed capital into the business of, and stimulate existing or 2 9 encourage new businesses in the area of, producing, 2 10 processing, or marketing horticultural or nontraditional 2 11 crops. 2 123. It is the public policy of the state through the linked2 13investments for tomorrow program to create an availability of2 14lower cost funds to inject needed capital into the business of2 15producing, processing, or marketing horticultural crops or2 16nontraditional crops.2 17 Sec. 3. Section 12.34, subsection 1, Code 1997, is amended 2 18 to read as follows: 2 19 1. The treasurer of state may invest up to the lesser of 2 20 sixty-five million dollars or ten percent of the balance of 2 21 the state pooled money fund in certificates of deposit in 2 22 eligible lending institutions pursuant to this division. 2 23 Sec. 4. Section 12.40, Code 1997, is amended to read as 2 24 follows: 2 25 12.40 RURAL SMALL BUSINESSTRANSFERLINKED INVESTMENT LOAN 2 26 PROGRAM. 2 27 1. As used in this section, "rural small business" means 2 28 an existing or new rural small business, for which local 2 29 competition does not exist in the principal realm of business 2 30 activity of that business, and the loss of which will work a 2 31 hardship on the rural community.A rural small business may2 32include a grocery store, drug store, gasoline station,2 33convenience store, hardware business, or farm supply store. A2 34rural small business does not include a new business.2 35 2. The treasurer of state shall adopt rules consistent 3 1 with this division to implement a rural small business 3 2transferlinked investment loan program to maintain and expand 3 3 existing employment opportunities and the provision ofretail3 4 goods and services on a local level in small rural communities 3 5 by assisting in thetransfer ofownership ofretail-oriented3 6 businesseswhere, in the absence of sufficient financial3 7assistance, the businesses may close. 3 8 3. In order to qualify as an eligible borrower, the rural 3 9 small business must be located in a city with a population of 3 10 five thousand or less.A city located in a county with a3 11population in excess of three hundred thousand, if the city is3 12contiguous to another city in the county and that other city3 13is contiguous to the largest city in that county, shall be3 14ineligible to qualify as a borrower.In order to qualify 3 15 under this program, the borrower must not have a net worth 3 16 exceeding five hundred thousand dollars as defined in rules 3 17 adopted by the treasurer of state pursuant to chapter 17A and 3 18 the rural small business must meet all of the following 3 19 criteria: 3 20 a. Be a for-profit business. 3 21 b. Have annual sales of two million dollars or less. 3 22 c. Not be operated out of the home of any person. 3 23 d. Not involve real estate investments, rental of real 3 24 estate, leasing of real estate, or real estate speculation. 3 25 e. Not provide professional services. 3 26 f. Liquor, beer, and wine sales must not exceed twenty 3 27 percent of annual sales. 3 28 4. In order to qualify as an eligible borrower, the 3 29 transfer ofthean existing rural small business must be by 3 30 purchase, lease-purchase, or contract of sale. The purchase 3 31 must be for a portion of the business which is essential to 3 32 its continued viability, includingreal estate where the3 33business is located,fixturesattached to the real estate,3 34 equipment, supplies, and machinery relied upon by the 3 35 business, and inventory for sale by the business. 4 1 5. In order to qualify as an eligible borrower, a borrower 4 2 and the seller ofthean existing rural small business shall 4 3 not be within the third degree of consanguinity or affinity. 4 4 6. A borrower who meets the requirements of subsection 3 4 5 may receive a loan under this program for a new rural small 4 6 business. Loan proceeds for a new rural small business shall 4 7 only be used for the acquisition of inventory, supplies, 4 8 machinery, fixtures, and equipment relied upon by the 4 9 business. 4 106.7. Loan proceeds shall not be used to refinance 4 11 existing debt, including credit card debt. However, proceeds 4 12 may be used to refinance a short-term bridge loan made in 4 13 anticipation of the treasurer's approval of the linked 4 14 investment loan package. 4 157.8. The maximumloanamount that a borrower or a 4 16 business may receiveunderduring the lifetime of this loan 4 17 program shall be fifty thousand dollars. 4 18 9. An eligible borrower with an outstanding loan made 4 19 under either the main street linked investments loan program, 4 20 as created in section 12.51, Code 1995, or the targeted small 4 21 business linked investments program, as created in section 4 22 12.43, Code 1997, shall be eligible to participate under the 4 23 provisions of this division for the remaining period of 4 24 eligibility under either of those programs. 4 25 Sec. 5. Section 12.41, subsection 1, Code 1997, is amended 4 26 to read as follows: 4 27 1. In order to qualify as an eligible borrower, the 4 28 borrower must not have a net worth exceeding five hundred 4 29 thousand dollars as defined in the rules adopted by the 4 30 treasurer and the loan applicationshallmust be for the 4 31 purchase or lease of land, machinery, equipment, or the 4 32 purchase of other inputs used in the business of producing, 4 33 processing, or marketing horticultural or nontraditional crops 4 34 as defined in rules adopted by the treasurer. 4 35 Sec. 6. Section 12.41, subsection 3, Code 1997, is amended 5 1 to read as follows: 5 2 3. The maximumloanamount that an eligible or new 5 3 borrower may receiveunderduring the lifetime of this loan 5 4 program is two hundred thousand dollarsfor a production loan5 5and five hundred thousand dollars for processing or marketing5 6facilities. Loans made under this program shall qualify for 5 7 the below market rate on the first fifty thousand dollars 5 8 loaned only. Each month the treasurer of state shall 5 9 determine and make available a blended rate for all loan 5 10 amounts above the first fifty thousand dollars loaned under 5 11 the program. A borrower under this program shall be limited 5 12 to one loan from one financial institution. 5 13 Sec. 7. Section 12.43, Code 1997, is repealed. 5 14 Sec. 8. Loan applications on file with the treasurer of 5 15 state on the effective date of this Act for the targeted small 5 16 business linked investment program shall be considered 5 17 eligible to be considered for participation under the relevant 5 18 linked deposit program in this division. 5 19 EXPLANATION 5 20 This bill relates to the linked investments programs in 5 21 Code chapter 12. 5 22 The bill amends Code section 12.32 relating to the 5 23 definitions used in the program. The bill provides that a 5 24 person does not qualify as an eligible borrower if the person 5 25 has been determined to be or becomes delinquent in paying 5 26 child support or any other payments due the state. The bill 5 27 provides that the treasurer of state shall determine and make 5 28 available each month the current market rate which shall be 5 29 used by institutions in determining interest rates for 5 30 certificates of deposit placed by the treasurer of state. The 5 31 bill provides that the treasurer of state may invest up to the 5 32 lesser of $65 million or 10 percent of the balance of the 5 33 state pooled money fund in certificates of deposit under the 5 34 linked deposit programs. 5 35 The bill provides that the rural small business program is 6 1 a loan program for an existing or new rural small business 6 2 located in a city with a population of 5,000 or less. The 6 3 bill provides that the program is not limited to situations 6 4 involving the transfer of ownership of an existing business. 6 5 In order to qualify under the program, the borrower must have 6 6 a net worth of $500,000 or less and the business must be a 6 7 for-profit business, the business must have annual sales of 6 8 $2,000,000 or less, the business must not be operated out of 6 9 any person's home, the business must not conduct real estate 6 10 transactions, the business must not provide professional 6 11 services, and liquor, beer, and wine sales must not exceed 20 6 12 percent of annual sales. 6 13 The bill provides that loan proceeds for a new rural small 6 14 business under the rural small business linked investment loan 6 15 program shall only be used for the purchase of inventory, 6 16 supplies, machinery, fixtures, and equipment relied upon by 6 17 the business. 6 18 The bill provides that the maximum amount that a borrower 6 19 or a business may receive during the lifetime of the rural 6 20 small business linked investment loan program shall be 6 21 $50,000. The bill provides that eligible businesses receiving 6 22 loans made under the main street linked investments loan 6 23 program or the targeted small business linked investments 6 24 program which remain outstanding shall be eligible to 6 25 participate under this program for the remaining eligibility 6 26 period under those two programs. 6 27 The bill amends the horticultural and nontraditional crops 6 28 linked investment loan program by providing that an eligible 6 29 borrower shall not have a net worth exceeding $500,000 and the 6 30 maximum amount a borrower may receive during the lifetime of 6 31 this loan program is $200,000. The bill provides that loans 6 32 made under the program shall qualify for the below market rate 6 33 for the first $50,000 loaned and a blended rate for all 6 34 amounts over the first $50,000 loaned under the program. The 6 35 bill provides that a borrower under the program shall be 7 1 limited to one loan from one financial institution. 7 2 The bill repeals the targeted small business linked 7 3 investments program under Code section 12.43. The targeted 7 4 small business linked investments program was created to 7 5 provide lower cost moneys to inject capital into small 7 6 businesses owned and operated by women or minorities. A 7 7 moratorium on new linked investments under this program is 7 8 currently in place until June 30, 1997, pursuant to 1996 Iowa 7 9 Acts, chapter 1058, section 9. 7 10 Loan applications on file with the treasurer of state on 7 11 the effective date of this Act for the targeted small business 7 12 linked investments program shall be eligible to be considered 7 13 under the relevant linked deposit program in this division. 7 14 LSB 2121YC 77 7 15 tm/jj/8
Text: HSB00209 Text: HSB00211 Text: HSB00200 - HSB00299 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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