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PAG LIN 1 1 SENATE FILE 2415 1 2 1 3 AN ACT 1 4 RELATING TO AGRICULTURAL FINANCE, PROVIDING AN APPROPRIA- 1 5 TION, AND PROVIDING AN EFFECTIVE DATE. 1 6 1 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 8 1 9 Section 1. LEGISLATIVE FINDINGS. The general assembly 1 10 finds and declares all of the following: 1 11 1. a. The economic structure of agriculture, including 1 12 the production of agricultural commodities and the processing 1 13 and marketing of agricultural products, is undergoing a period 1 14 of rapid transformation. 1 15 (1) Longstanding government programs supporting prices for 1 16 agricultural commodities are being phased out, and new 1 17 technologies and management arrangements are creating large 1 18 scale integrated systems for producing and processing 1 19 agricultural commodities, and marketing agricultural processed 1 20 products. 1 21 (2) An increasing world demand exists for high quality 1 22 agricultural products caused by the simultaneous reduction of 1 23 trade barriers among nations and an increase in income of 1 24 those nations' populations. 1 25 b. The ability of this state and its agricultural 1 26 producers to adapt to these forces and their consequences at 1 27 the threshold of the twenty-first century will determine the 1 28 degree to which this state will prosper. 1 29 2. A need exists to support the production of agricultural 1 30 commodities and the processing and marketing of agricultural 1 31 products which are produced by using biological techniques for 1 32 the development of specialized plant or animal characteristics 1 33 for beneficial nutritional, commercial, or industrial 1 34 purposes. A need also exists to support biomass energy 1 35 sources. 2 1 3. A need exists to support forests and the growth and 2 2 maintenance of forests in this state, including the production 2 3 of agricultural commodities which are forest products as 2 4 provided in section 15E.202. 2 5 4. a. A need exists for additional sources of financing 2 6 for local agricultural producer-led ventures to expand 2 7 production, processing, and marketing of high value 2 8 agricultural products, to organize new business structures 2 9 within the state to carry out these ventures, and to market 2 10 and deliver increasingly high value agricultural products to 2 11 consumers around the world. 2 12 b. Traditional channels of financing and business 2 13 organization have not been adequate to address this need. 2 14 c. A trend toward corporate vertical integration in the 2 15 production, processing, and marketing of agricultural products 2 16 exists which requires agricultural producers to develop 2 17 innovative cooperative ventures in order to successfully 2 18 compete in a changing marketplace. 2 19 5. A need exists for additional sources of financing for 2 20 ventures designed to support the production, processing, and 2 21 marketing of high value agricultural products using biological 2 22 techniques which create increasingly high value agricultural 2 23 products for consumers around the world. 2 24 6. It is necessary for the state to authorize the 2 25 formation of private corporations in order to provide sources 2 26 of investment capital to encourage Iowa agricultural industry 2 27 ventures, including providing limited state financial support 2 28 necessary to stimulate these ventures. 2 29 7. All of the purposes stated in this Act are public 2 30 purposes. All of the following is necessary in order to 2 31 satisfy the intent and promote the purposes of this Act: 2 32 a. The authorization of the formation of Iowa agricultural 2 33 industry finance corporations as provided in this Act, 2 34 including authorizing persons to facilitate the formation of a 2 35 private corporation. 3 1 b. The use of public moneys to support activities 3 2 identified in this Act, including funding Iowa agricultural 3 3 industry finance corporations, making available loans to 3 4 initiate ventures as provided in this Act, and providing 3 5 incentives included in this Act for qualified Iowa 3 6 agricultural industry financing corporations. 3 7 DIVISION XIX 3 8 IOWA AGRICULTURAL INDUSTRY FINANCE CORPORATIONS 3 9 Sec. 2. NEW SECTION. 15E.201 SHORT TITLE. 3 10 This division shall be known and may be cited as the "Iowa 3 11 Agricultural Industry Finance Act". 3 12 Sec. 3. NEW SECTION. 15E.202 DEFINITIONS. 3 13 Except as otherwise provided in this division, or unless 3 14 the context otherwise requires, the words and phrases used in 3 15 this division shall have the same meaning as the words and 3 16 phrases used in chapter 490, including but not limited to the 3 17 words and phrases used in section 490.140. In addition, all 3 18 of the following shall apply: 3 19 1. "Actively engaged in agriculture" means to do any of 3 20 the following: 3 21 a. Inspect agricultural operations periodically and 3 22 furnish at least half the direct cost of the operations. 3 23 b. Regularly and frequently make or take an important part 3 24 in making management decisions substantially contributing to 3 25 or affecting the success of the agricultural operation. 3 26 c. Perform physical work which significantly contributes 3 27 to agricultural operation. 3 28 2. "Agricultural commodity" means any unprocessed 3 29 agricultural product, including livestock as defined in 3 30 section 717.1, agricultural crops, and forestry products 3 31 grown, raised, produced, or fed in this state for sale in 3 32 commercial channels. 3 33 3. "Agricultural operation" means an operation concerned 3 34 with the production of agricultural commodities for processing 3 35 into agricultural processed products. 4 1 4. "Agricultural processed product" means an agricultural 4 2 commodity that has been processed for sale in commercial 4 3 markets. 4 4 5. "Agricultural producer" means a person who is any of 4 5 the following: 4 6 a. An individual actively engaged in agricultural 4 7 production. 4 8 b. A person other than an individual, if the person is any 4 9 of the following: 4 10 (1) A general partnership in which all the partners are 4 11 natural persons, and one of the partners is actively engaged 4 12 in agricultural production. 4 13 (2) A family farm entity if any of the following 4 14 individuals is actively engaged in agricultural production: 4 15 (a) A shareholder and an officer, director, or employee of 4 16 a family farm corporation. 4 17 (b) A member or manager of a family farm limited liability 4 18 company. 4 19 (c) A general partner of a family farm limited 4 20 partnership. 4 21 (d) A beneficiary of a family trust. 4 22 (3) A networking farmers entity. 4 23 6. "Agricultural product" means an agricultural commodity 4 24 or an agricultural processed product. 4 25 7. "Biotechnology enterprise" means an enterprise 4 26 organized under the laws of this state using biological 4 27 techniques for the development of specialized plant or animal 4 28 characteristics for beneficial nutritional, commercial, or 4 29 industrial purposes. 4 30 8. "Certified facility" means a facility used to process 4 31 agricultural products as certified by a corporation pursuant 4 32 to section 15E.210. 4 33 9. "Department" means the department of economic 4 34 development as created in section 15.101. 4 35 10. "Economic development board" means the economic 5 1 development board created pursuant to section 15.103. 5 2 11. "Family farm entity" means a family farm corporation, 5 3 family farm limited liability company, family farm limited 5 4 partnership, or family trust as defined in section 9H.1. 5 5 12. "Iowa agricultural industry finance corporation" or 5 6 "corporation" means a corporation formed under this division. 5 7 13. "Iowa agricultural industry finance loan" means a loan 5 8 made to a qualified Iowa agricultural industry finance 5 9 corporation pursuant to section 15E.208. 5 10 14. "Iowa agricultural industry venture" means an 5 11 enterprise involving any of the following: 5 12 a. Agricultural producers investing in a new facility or 5 13 acquiring or expanding an existing facility in this state 5 14 which is used to process agricultural commodities produced in 5 15 this state, if the purpose of the enterprise is to accomplish 5 16 all of the following: 5 17 (1) The creation and retention of wealth in this state 5 18 derived from processing and marketing agricultural commodities 5 19 produced in this state. 5 20 (2) Increasing production, processing, and marketing of 5 21 value-added agricultural products in this state. 5 22 (3) Providing for a substantial equitable ownership 5 23 interest in the enterprise by Iowa agricultural producers. 5 24 (4) Providing an alternative in this state to corporate 5 25 vertical integration in the production, processing, and 5 26 marketing of agricultural products. 5 27 b. An agricultural biotechnology enterprise located in 5 28 this state, if the purpose of research and application of 5 29 biological techniques conducted by the enterprise is to 5 30 accomplish all of the following: 5 31 (1) The creation and retention of wealth in this state. 5 32 (2) Increasing the value of agricultural commodities. 5 33 15. "Loan" means providing financing to a person under an 5 34 agreement requiring that the amount in financing be repaid at 5 35 a maturity date, with an interest rate, and other conditions 6 1 as specified in the agreement. 6 2 16. "Networking farmers entity" means the same as defined 6 3 in section 10.1, as enacted by 1998 Iowa Acts, House File 6 4 2335. 6 5 17. "Qualified investor" means any of the following: 6 6 a. An agricultural producer. 6 7 b. A cooperative corporation organized under chapter 501. 6 8 c. A networking farmers entity. 6 9 18. "Qualified Iowa agricultural industry finance 6 10 corporation" or "qualified corporation" means an Iowa 6 11 agricultural industry financing corporation which meets the 6 12 eligibility requirements of and is approved by the department 6 13 pursuant to section 15E.208. 6 14 Sec. 4. NEW SECTION. 15E.203 FINDINGS – INTENT AND 6 15 PURPOSES. 6 16 1. The general assembly finds that this state is in a 6 17 period when the economic structure of agriculture and the 6 18 production, processing, and marketing of agricultural products 6 19 is undergoing a period of rapid transformation. 6 20 2. It is the intent of the general assembly and purpose of 6 21 this division that this state capture the greatest benefit 6 22 from opportunities created during this period, by encouraging 6 23 local agricultural producer-led ventures to expand production 6 24 and processing of high value agricultural products, including 6 25 agricultural processed products, to organize new business 6 26 structures within the state to carry out these ventures, and 6 27 to market and deliver increasingly high value agricultural 6 28 products to consumers around the world. In carrying out this 6 29 purpose, state resources provided by this division shall be 6 30 used to assure all of the following: 6 31 a. That the majority of the wealth created by Iowa 6 32 agricultural productivity is retained in this state. 6 33 b. That employment in the production, processing, and 6 34 marketing of agricultural products, and especially 6 35 agricultural processed products, is increased in this state. 7 1 c. That agricultural producers in this state are provided 7 2 with an opportunity to acquire a majority ownership interest 7 3 in Iowa agricultural industry ventures promoted under this 7 4 division. 7 5 d. That this state becomes a world model for agricultural 7 6 producer-based vertical cooperation which depends upon broadly 7 7 shared access to information, capital, and cooperative action. 7 8 e. That the use of private resources with state incentives 7 9 establish Iowa as the world leader in responsibly produced 7 10 agricultural products that meet the needs of consumers 7 11 throughout the world. 7 12 3. It is the intent of the general assembly and the 7 13 purpose of this division that the state encourage Iowa 7 14 agricultural industry ventures which promote the research and 7 15 application of biological techniques for the development of 7 16 specialized plant or animal characteristics for beneficial 7 17 nutritional, commercial, or industrial purposes. 7 18 Sec. 5. NEW SECTION. 15E.204 IOWA AGRICULTURAL INDUSTRY 7 19 FINANCE CORPORATIONS – SCOPE OF POWERS AND DUTIES. 7 20 1. An Iowa agricultural industry finance corporation 7 21 formed under this division shall be subject to and have the 7 22 powers and privileges conferred by provisions of chapter 490, 7 23 unless otherwise limited by or inconsistent with the 7 24 provisions of this division. 7 25 2. Nothing in this division requires any of the following: 7 26 a. That a limited number of Iowa agricultural industry 7 27 finance corporations are authorized to be formed. However, 7 28 the department may strictly interpret and apply the 7 29 requirements of this division in determining whether a 7 30 corporation is a qualified corporation under section 15E.208. 7 31 b. That a corporation be organized on a cooperative basis, 7 32 including structured, organized, or operated pursuant to 26 7 33 U.S.C. } 1381(a). 7 34 c. That a corporation is restricted from holding, 7 35 acquiring, or transferring financial or security instruments, 8 1 including but not limited to a security regulated under 8 2 chapter 502, money, accounts, and chattel paper under chapter 8 3 554, security interests under chapter 554, or a mortgage or 8 4 deed of trust under chapter 654. 8 5 3. An Iowa agricultural industry finance corporation is a 8 6 private business corporation and not a public corporation or 8 7 instrumentality of the state. Except as provided in this 8 8 division, nothing in this division exempts an Iowa 8 9 agricultural industry finance corporation from the same 8 10 requirements under state law which apply to other corporations 8 11 organized under chapter 490, including taxation provisions 8 12 under chapter 422 or Title X, subtitle 2 of this Code, or 8 13 security regulations under chapter 502. 8 14 Sec. 6. NEW SECTION. 15E.205 IOWA AGRICULTURAL INDUSTRY 8 15 FINANCE CORPORATIONS – REQUIREMENTS. 8 16 1. A corporation incorporated under chapter 490 is an Iowa 8 17 agricultural industry finance corporation, if the corporation 8 18 complies with the requirements of this section and section 8 19 15E.206. In addition to the other requirements for a 8 20 corporation organized under chapter 490, all of the following 8 21 shall apply: 8 22 a. At least fifty-one percent of the corporation's common 8 23 stock must be held by agricultural producers. At least fifty- 8 24 one percent of the corporation's voting stock must be held by 8 25 agricultural producers. 8 26 b. A director of the corporation's board of directors 8 27 shall not serve for more than seven consecutive years as a 8 28 board director. 8 29 c. The purpose of the corporation must be limited to 8 30 providing financing to eligible persons under section 15E.210 8 31 who are engaging in Iowa agricultural industry ventures 8 32 limited to establishing a business structure in which 8 33 agricultural producers produce agricultural commodities for 8 34 processing and marketing as agricultural processed products. 8 35 2. The requirements of this section shall be memorialized 9 1 in the corporation's articles of incorporation. 9 2 Sec. 7. NEW SECTION. 15E.206 FORMATION OF AN IOWA 9 3 AGRICULTURAL INDUSTRY FINANCE CORPORATION. 9 4 1. This section authorizes the formation of Iowa 9 5 agricultural industry finance corporations in order to perfect 9 6 the manner in which such corporations are formed and operate. 9 7 Such a corporation is a private business corporation and not a 9 8 public corporation or instrumentality of the state. The 9 9 corporation shall not enjoy any of the privileges nor be 9 10 required to comply with any of the requirements of a state 9 11 agency. 9 12 2. In facilitating the formation of an Iowa agricultural 9 13 industry finance corporation, the following persons shall 9 14 serve as incorporators as provided in section 490.201: 9 15 a. The chairperson of the economic development board or a 9 16 designee of the chairperson. 9 17 b. The director of the department of economic development, 9 18 or a designee of the director. 9 19 c. The secretary of agriculture or a designee of the 9 20 secretary. 9 21 3. a. After incorporation, such a corporation shall be 9 22 organized by an initial board of directors as provided in 9 23 chapter 490, division II. The initial board of directors 9 24 shall be elected by the members of an appointment committee. 9 25 The members of the appointment committee shall be appointed by 9 26 the economic development board. The initial board of 9 27 directors shall consist of seven members. The members of the 9 28 appointment committee shall include persons who have an 9 29 expertise in areas of banking, agricultural lending, business 9 30 development, agricultural production and processing, seed and 9 31 venture capital investment, and other areas of expertise as 9 32 deemed appropriate by the interim board of directors. 9 33 b. The members of the appointment committee shall exercise 9 34 due care to assure that persons appointed to the initial board 9 35 of directors have the requisite financial experience necessary 10 1 in order to carry out the duties of the corporation as 10 2 established in this division, including in areas related to 10 3 agricultural lending, commercial banking, and investment 10 4 management. 10 5 c. Upon the election of the initial board of directors, 10 6 the terms of the members of the appointment committee shall 10 7 expire. 10 8 d. The department shall assist the incorporators and the 10 9 appointment committee in any manner determined necessary and 10 10 appropriate by the economic development board and the director 10 11 of the department in order to administer this section. 10 12 Sec. 8. NEW SECTION. 15E.207 IOWA AGRICULTURAL INDUSTRY 10 13 FINANCE CORPORATIONS – GUIDING PRINCIPLES. 10 14 In carrying out its duties and exercising its powers under 10 15 this division, an Iowa agricultural industry finance 10 16 corporation shall be guided by the following principles: 10 17 1. The corporation must exercise diligence and care in the 10 18 selection of persons and projects to receive financing as 10 19 provided in section 15E.210. The corporation must apply 10 20 customary and acceptable business and lending standards and 10 21 practices in selecting persons and projects designated for 10 22 financing and managing agreements under which financing is 10 23 provided. 10 24 In selecting projects to receive financing, it is the 10 25 intent of the general assembly that the corporation seek 10 26 projects with wage, benefit, and work safety plans which 10 27 improve the quality of employment in the state and which would 10 28 not displace employees of existing Iowa agricultural industry 10 29 ventures. 10 30 2. Except as otherwise provided in this section, the 10 31 corporation shall not become an owner of real or depreciable 10 32 property, including agricultural land, as provided in section 10 33 9H.4. However, this subsection shall not preclude the 10 34 corporation from holding an interest in real or depreciable 10 35 property if any of the following apply: 11 1 a. The corporation holds nonagricultural property for 11 2 purposes of carrying out the management of its corporate 11 3 affairs, including office space, furniture, and supplies. 11 4 b. The corporation holds an interest in real or 11 5 depreciable property on a temporary basis, and any of the 11 6 following apply: 11 7 (1) The interest is a bona fide encumbrance taken for 11 8 purposes of security in connection with providing financing 11 9 under section 15E.210. 11 10 (2) The interest is acquired by operation of law, 11 11 including by any of the following: 11 12 (a) Devise or bequest. 11 13 (b) Court order. 11 14 (c) Dissolution under chapter 490, division XIV. 11 15 (d) Order in bankruptcy. 11 16 (e) Pursuant to a proceeding to enforce a debt against 11 17 real property under chapter 654, to forfeit a contract to 11 18 purchase real property under chapter 656, to enforce a secured 11 19 interest in real or depreciable property under chapter 554, or 11 20 to otherwise garnish, levy on, execute on, seize, or attach 11 21 real or depreciable property in the collection of debts, or by 11 22 any procedure for the enforcement of a lien or claim. 11 23 (3) The interest is acquired in order to facilitate a 11 24 transfer between persons pursuant to a transaction authorized 11 25 under this division. 11 26 Sec. 9. NEW SECTION. 15E.208 QUALIFIED CORPORATIONS – 11 27 IOWA AGRICULTURAL INDUSTRY FINANCE LOANS. 11 28 1. The department may award an Iowa agricultural industry 11 29 finance loan to an Iowa agricultural industry finance 11 30 corporation, if the department in its discretion determines 11 31 that the corporation is qualified under this section. 11 32 2. The corporation must apply for an Iowa agricultural 11 33 industry finance loan on forms and according to procedures 11 34 required by the department. 11 35 3. The department shall loan all of the amounts available 12 1 to the department pursuant to this division to a qualified 12 2 corporation with provisions and restrictions as determined by 12 3 the department and contained in a loan agreement executed 12 4 between the department and the qualified corporation. 12 5 a. The department may attach conditions to the granting of 12 6 the loan as it deems desirable, including any restrictions on 12 7 the subordination of the moneys loaned. The attorney general 12 8 shall assist the department in drafting loan agreements and in 12 9 collecting on the loan agreement. 12 10 b. The loan shall be repayable upon terms and conditions 12 11 negotiated by the parties. The repayment period shall begin 12 12 six years following the date when the loan is awarded and end 12 13 twenty-five years after the date that the repayment period 12 14 begins. At least four percent of the amount due shall be paid 12 15 each year to the department. The corporation shall not be 12 16 subject to a prepayment penalty. 12 17 c. The corporation shall not expend moneys originating 12 18 from the state, including moneys loaned under this section, on 12 19 political activity or on any attempt to influence legislation. 12 20 4. A corporation shall not provide financing to support a 12 21 person who is any of the following: 12 22 a. An agricultural producer, if any of the following 12 23 applies: 12 24 (1) The agricultural producer is a party to a pending 12 25 action for a violation of chapter 455B concerning a 12 26 confinement feeding operation in which the person has a 12 27 controlling interest and the action is commenced in district 12 28 court by the attorney general. 12 29 (2) The agricultural producer or a confinement feeding 12 30 operation in which the agricultural producer holds a 12 31 controlling interest is classified as a habitual violator 12 32 under section 455B.191. 12 33 b. An agricultural products processor, if the processor or 12 34 a person owning a controlling interest in the processor has 12 35 demonstrated, within the most recent consecutive three-year 13 1 period prior to the application for financing, a continuous 13 2 and flagrant disregard for the health and safety of its 13 3 employees or the quality of the environment. Violations of 13 4 environmental protection statutes, rules, or regulations shall 13 5 be reported for the most recent five-year period prior to 13 6 application. Evidence of such disregard shall include a 13 7 history of serious or uncorrected violations of state or 13 8 federal law protecting occupational health and safety or the 13 9 environment, including but not limited to serious or 13 10 uncorrected violations of occupational safety and health 13 11 standards enforced by the division of labor services of the 13 12 department of employment services pursuant to chapter 84A, or 13 13 rules enforced by the environmental protection division of the 13 14 department of natural resources pursuant to chapter 455B. 13 15 c. A member of the economic development board, an employee 13 16 of the department of economic development, an elected state 13 17 official, or any director or other officer or an employee of 13 18 the corporation. 13 19 5. In order to be eligible as a qualified Iowa 13 20 agricultural industry finance corporation, all of the 13 21 following conditions must be satisfied: 13 22 a. The corporation must only provide financing to persons 13 23 and ventures eligible under section 15E.210. 13 24 b. The corporation must demonstrate that it complies with 13 25 guiding principles for the corporation as provided in section 13 26 15E.207. 13 27 c. The corporation must adopt policies and procedures 13 28 which maximize public oversight into the affairs of the 13 29 corporation, by providing a forum for public comment, an 13 30 opportunity for public review of the corporation's actions, 13 31 and methods to ensure accountability for the expenditure of 13 32 public moneys loaned to the corporation. 13 33 d. The corporation's articles of incorporation must comply 13 34 with requirements established by the department relating to 13 35 the capacity and integrity of the corporation to carry out the 14 1 purposes of this division, including but not limited to all of 14 2 the following: 14 3 (1) The capitalization of the corporation. 14 4 (2) The manner in which financing is provided by the 14 5 corporation, including the manner in which an Iowa 14 6 agricultural industry finance loan can be used by the 14 7 corporation. 14 8 (3) The composition of the corporation's board of 14 9 directors. The board must be composed of persons 14 10 knowledgeable in Iowa agricultural industries including a 14 11 representative number of individuals experienced and 14 12 knowledgeable in financing new agricultural industries. 14 13 (4) The manner of oversight required by the department or 14 14 the auditor of state. The articles must provide that the 14 15 corporation shall submit a report to the governor, the general 14 16 assembly, and the department. The report shall provide a 14 17 description of the corporation's activities and a summary of 14 18 its finances, including financial awards. The report shall be 14 19 submitted not later than January 10 of each year. The 14 20 articles shall provide that an audit of the corporation must 14 21 be conducted each year for the preceding year by a certified 14 22 public accountant licensed pursuant to chapter 542C. The 14 23 auditor of state may audit the books and accounts of the 14 24 corporation at any time. The results of the annual audit and 14 25 any audit for the current year conducted by the auditor of 14 26 state shall be included as part of the report. 14 27 (5) The execution of an agreement between the corporation 14 28 and an eligible recipient as required by the department as a 14 29 condition of providing financing, in which the eligible 14 30 recipient agrees to become a shareholder in the corporation. 14 31 If the eligible recipient is an agricultural producer as 14 32 provided in section 15E.210, the agreement shall not be 14 33 executed unless the agricultural producer holds voting common 14 34 stock in the corporation equal to at least five percent of the 14 35 financing provided to the agricultural producer pursuant to 15 1 the agreement. The agreement shall be for a period of not 15 2 less than ten years. An agreement shall at least provide all 15 3 of the following: 15 4 (a) The establishment of a common stock pricing system. 15 5 The stock shall be frozen against price appreciation for the 15 6 first five years of the life of the corporation. The articles 15 7 shall contain waivers for death and disability. 15 8 (b) The maintenance of stock ownership by an eligible 15 9 recipient until a financial assistance obligation due the 15 10 corporation is satisfied. 15 11 (c) A requirement that the par value of participating 15 12 common stock be established prior to providing financial 15 13 assistance to an eligible recipient. 15 14 e. To the extent feasible and fiscally prudent, the 15 15 corporation must maintain a portfolio which is diversified 15 16 among the various types of agricultural commodities and 15 17 agribusiness. 15 18 f. Not more than seventy-five percent of moneys 15 19 originating from the state, including moneys loaned to the 15 20 corporation pursuant to this section, may be used to finance 15 21 any one Iowa agricultural industry venture. 15 22 g. The corporation may only be terminated by the following 15 23 methods, unless approved by the department: 15 24 (1) Merger or share exchange under chapter 490, division 15 25 XI. 15 26 (2) Dissolution as provided in chapter 490, division XIV, 15 27 part A. 15 28 (3) A sale, lease, exchange, mortgage, pledge, transfer, 15 29 or other disposition, in one or more transactions of assets of 15 30 the corporation which has an aggregate market value equal to 15 31 fifty percent or more of either the aggregate market value of 15 32 all of the assets of the corporation determined on a 15 33 consolidated basis, or the aggregate market value of all the 15 34 outstanding stock of the corporation. 15 35 6. The department shall provide for the default of the 16 1 loan if the qualified corporation does any of the following: 16 2 a. Violates a provision of the articles of incorporation 16 3 or an amendment to the articles of incorporation that is 16 4 required by this division which violation is not approved by 16 5 the department. 16 6 b. Violates the terms of the loan agreement executed 16 7 between the department and the corporation, which violation is 16 8 not approved by the department. 16 9 c. Fails to comply with the requirements of section 16 10 15E.205. 16 11 d. Completes a transaction, if all of the following apply: 16 12 (1) The transaction involves any of the following: 16 13 (a) A merger or share exchange under chapter 490, division 16 14 XI. 16 15 (b) The sale, lease, exchange, mortgage, pledge, transfer, 16 16 or other disposition, in one or more transactions of assets of 16 17 the corporation which has an aggregate market value equal to 16 18 fifty percent or more of either the aggregate market value of 16 19 all of the assets of the corporation determined on a 16 20 consolidated basis, or the aggregate market value of all the 16 21 outstanding stock of the corporation. 16 22 (2) The surviving entity of a merger or share exchange, or 16 23 the entity acquiring the assets of the corporation fails to 16 24 meet the requirements of section 15E.205. 16 25 7. In an action to enforce a judgment against a qualified 16 26 corporation, the interest of the state shall be subrogated to 16 27 the interests of holders of bonds issued by the corporation. 16 28 8. Moneys repaid or collected by the department under this 16 29 section shall be deposited into the road use tax fund created 16 30 pursuant to section 312.1. 16 31 Sec. 10. NEW SECTION. 15E.210 FINANCING PROVIDED BY AN 16 32 IOWA AGRICULTURAL INDUSTRY FINANCE CORPORATION. 16 33 1. An Iowa agricultural industry finance corporation may 16 34 only provide financing to a person determined eligible by the 16 35 corporation according to requirements of the corporation and 17 1 this section. At a minimum, an eligible person must be one of 17 2 the following: 17 3 a. An agricultural producer participating in an Iowa 17 4 agricultural industry venture as provided according to the 17 5 terms of an agreement executed by the agricultural producer 17 6 and the corporation. The agreement may require that the 17 7 agricultural producer acquire an interest in an agricultural 17 8 products processor certified by the corporation, or enter into 17 9 a marketing agreement under which the agricultural producer 17 10 agrees to market an amount of the agricultural producer's 17 11 agricultural commodities to the agricultural products 17 12 processor. 17 13 b. An agricultural products processor which participates 17 14 as part of an Iowa agricultural industry venture as provided 17 15 according to the terms of an agreement executed by the 17 16 agricultural products processor and the corporation. The 17 17 corporation shall only provide financing if the venture 17 18 involves the construction, expansion, or acquisition of an 17 19 agricultural products processing facility as certified by the 17 20 corporation and if all of the following apply: 17 21 (1) The certified facility must be located in this state. 17 22 (2) Either of the following apply: 17 23 (a) More than fifty percent of the ownership interest in 17 24 the certified facility must be held by qualified investors. 17 25 If the certified facility is owned by an entity rather than by 17 26 individuals, more than fifty percent of the interest in the 17 27 entity and more than fifty percent of the voting interest in 17 28 the entity must be held by qualified investors. 17 29 (b) More than fifty percent of the commodities processed 17 30 by the certified facility during any twelve-month period is 17 31 produced in this state. However, the corporation may provide 17 32 financing, if its board of directors determines that adequate 17 33 supplies of the commodity are not available for processing as 17 34 otherwise required in this subparagraph subdivision. 17 35 c. An agricultural biotechnology enterprise which 18 1 qualifies as an Iowa agricultural industry venture as provided 18 2 according to the terms of an agreement executed by the 18 3 agricultural biotechnology enterprise and the corporation, if 18 4 the board of directors for the corporation determines that the 18 5 enterprise would advance the intent and purposes set out in 18 6 section 15E.203. 18 7 2. Financing may be in the form of a loan, loan guarantee, 18 8 sale and purchase of mortgage instruments for eligible 18 9 recipients, or other similar forms of financing. The 18 10 financing shall be awarded pursuant to an agreement between 18 11 the corporation and the eligible person. 18 12 3. A corporation shall not provide financing to support an 18 13 outstanding debt or other obligation, regardless of whether 18 14 the original financing was provided by a corporation. 18 15 Sec. 11. NEW SECTION. 15E.211 OBLIGATIONS. 18 16 The obligations of the corporation are not obligations of 18 17 this state or any political subdivision of this state within 18 18 the meaning of any constitutional or statutory debt 18 19 limitations, but are obligations of the corporation payable 18 20 solely and only from the corporation's funds. The corporation 18 21 shall not pledge the credit or taxing power of this state or 18 22 any political subdivision of this state or make its debts 18 23 payable out of any moneys except for those of the corporation. 18 24 Sec. 12. NEW SECTION. 15E.212 RULES. 18 25 The department may adopt rules pursuant to chapter 17A 18 26 necessary to administer this division. 18 27 Sec. 13. Section 423.24, Code Supplement 1997, is amended 18 28 by inserting the following new unnumbered paragraph before 18 29 subsection 1: 18 30 NEW UNNUMBERED PARAGRAPH. Except as otherwise provided in 18 31 section 312.2, subsection 15, all revenues derived from the 18 32 use tax on motor vehicles, trailers, and motor vehicle 18 33 accessories and equipment as collected pursuant to sections 18 34 423.7 and 423.7A shall be deposited and credited to the road 18 35 use tax fund and shall be used exclusively for the 19 1 construction, maintenance, and supervision of public highways. 19 2 Sec. 14. Section 423.24, subsection 1, unnumbered 19 3 paragraph 1, Code Supplement 1997, is amended to read as 19 4 follows: 19 5Eighty percent ofNotwithstanding any provision of this 19 6 section which provides that all revenues derived from the use 19 7 tax on motor vehicles, trailers, and motor vehicle accessories 19 8 and equipment as collected pursuant to section 423.7 and 19 9 section 423.7A shall be deposited and credited to the road use 19 10 tax fund, eighty percent of the revenues shall be deposited 19 11 and credited as follows: 19 12 Sec. 15. Section 423.24, subsection 1, paragraph a, 19 13 subparagraph (2), Code Supplement 1997, is amended to read as 19 14 follows: 19 15 (2)Beginning January 1, 1996, through December 31, 1997,19 16two million five hundred thousand dollars per quarter shall be19 17deposited into and credited to the Iowa comprehensive19 18petroleum underground storage tank marketability fund created19 19in section 455G.21.Beginning January 1, 1998, through 19 20December 31, 2002June 30, 1999, four million two hundred 19 21 fifty thousand dollars per quarter shall bedeposited into and19 22 credited to theIowa comprehensive petroleum underground19 23storage tank marketability fund created in section 455G.2119 24 department of economic development. However, not more than a 19 25 total of twenty-five million dollars shall be credited to the 19 26 department. The moneys sodepositedcredited are a continuing 19 27 appropriation to be expendedin accordance with section19 28455G.21to carry out the provisions of section 15E.208, and 19 29 the moneys shall not be used for other purposes. 19 30 Sec. 16. Section 423.24, subsection 1, paragraph c, Code 19 31 Supplement 1997, is amended by striking the paragraph. 19 32 Sec. 17. Section 423.24, subsection 2, Code Supplement 19 33 1997, is amended to read as follows: 19 34 2.Twenty percent ofNotwithstanding any other provision 19 35 of this section that provides that all revenue derived from 20 1 the use tax on motor vehicles, trailers, and motor vehicle 20 2 accessories and equipment as collected pursuant to section 20 3 423.7 shall be deposited and credited to the road use tax 20 4 fund, twenty percent of the revenues shall be credited and 20 5 deposited as follows: one-half to the road use tax fund and 20 6 one-half to the primary road fund to be used for the 20 7 commercial and industrial highway network, except to the 20 8 extent that the department directs that moneys are deposited 20 9 in the highway safety patrol fund created in section 80.41 to 20 10 fund the appropriations made from the highway safety patrol 20 11 fund in accordance with the provisions of section 80.41. The 20 12 department shall determine the amount of moneys to be credited 20 13 under this subsection to the highway safety patrol fund and 20 14 shall deposit that amount into the highway safety patrol fund. 20 15 Sec. 18. NEW SECTION. 423.24A REIMBURSEMENT FOR THE 20 16 PRIMARY ROAD FUND. 20 17 From moneys deposited into the road use tax fund, the 20 18 department may credit to the primary road fund any amount of 20 19 revenues derived from the use tax on motor vehicles, trailers, 20 20 and motor vehicles accessories and equipment as collected 20 21 pursuant to sections 423.7 and 423.7A to the extent necessary 20 22 to reimburse that fund for the expenditures not otherwise 20 23 eligible to be made from the primary road fund, which are made 20 24 for repairing, improving, and maintaining bridges over the 20 25 rivers bordering the state. Expenditures for those portions 20 26 of bridges within adjacent states may be included when they 20 27 are made pursuant to an agreement entered into under section 20 28 313.63, 313A.34, or 314.10. 20 29 Sec. 19. 1995 Iowa Acts, chapter 215, section 29, 20 30 subsection 1, is amended to read as follows: 20 31 1. Section 423.24, subsection 1, paragraph "a", 20 32 subparagraph (2) is repealed onJanuary 1, 2003July 1, 1999. 20 33 Sec. 20. TRANSFER AND RETROACTIVITY. Moneys deposited in 20 34 the Iowa comprehensive petroleum underground storage tank 20 35 marketability fund created in section 455G.21 derived from the 21 1 use tax as provided in section 423.24, Code Supplement 1997, 21 2 from January 1, 1998, until July 1, 1998, shall be transferred 21 3 to the department of economic development for use as provided 21 4 in section 15E.208, as enacted in this Act. This section 21 5 shall be retroactively applicable on and after January 1, 21 6 1998. 21 7 Sec. 21. SEVERABILITY. If any provision of this Act or 21 8 the application of this Act to any person or circumstance is 21 9 held invalid, the invalidity shall not affect other provisions 21 10 or applications of this Act which shall be given effect 21 11 without the invalid provision or application, and to this end 21 12 the provisions of this Act are severable. 21 13 Sec. 22. EFFECTIVE DATE. Section 20 of this Act, being 21 14 deemed of immediate importance, takes effect upon enactment. 21 15 21 16 21 17 21 18 MARY E. KRAMER 21 19 President of the Senate 21 20 21 21 21 22 21 23 RON J. CORBETT 21 24 Speaker of the House 21 25 21 26 I hereby certify that this bill originated in the Senate and 21 27 is known as Senate File 2415, Seventy-seventh General Assembly. 21 28 21 29 21 30 21 31 MARY PAT GUNDERSON 21 32 Secretary of the Senate 21 33 Approved , 1998 21 34 21 35 22 1 22 2 TERRY E. BRANSTAD 22 3 Governor
Text: SF02414 Text: SF02416 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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