House File 654 - Introduced
HOUSE FILE
BY THOMAS and KUHN
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to economic development initiatives by providing
2 for the Iowa agricultural industry finance Act, providing for
3 the repayment of moneys loaned by the department of economic
4 development to a corporation, providing for the allocation of
5 those moneys, and providing effective dates.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 10C.3, unnumbered paragraph 1, Code
1 2 2005, is amended to read as follows:
1 3 Notwithstanding any other provision of law, a life science
1 4 enterprise may acquire or hold an ownership or leasehold
1 5 interest in agricultural land if the economic development
1 6 board approves a life science enterprise plan as provided in
1 7 section 15.104. A life science enterprise must acquire or
1 8 hold the agricultural land pursuant to the plan which may be
1 9 amended as provided by the board. However, the life science
1 10 enterprise shall not hold a total of more than three hundred
1 11 twenty acres of agricultural land. The life science
1 12 enterprise shall hold the land only for purposes of producing
1 13 life science products according to the life science enterprise
1 14 plan. In addition, the life science enterprise shall not
1 15 acquire or hold agricultural land if the life science
1 16 enterprise receives any form of financing from an Iowa
1 17 agricultural industry finance corporation as provided in
1 18 chapter 15E. A life science enterprise that complies with
1 19 this section may hold the interest in the agricultural land,
1 20 as provided in the plan, for as long as commercial sales of
1 21 products produced from the agricultural land are subject to
1 22 the following:
1 23 Sec. 2. Section 12C.6A, subsection 4, paragraph g, Code
1 24 2005, is amended to read as follows:
1 25 g. Participation in local community and rural development
1 26 and redevelopment projects, and in state and federal business
1 27 and economic development programs, including investment in an
1 28 Iowa agricultural industry finance corporation formed under
1 29 the Iowa agricultural industry finance Act pursuant to chapter
1 30 15E.
1 31 Sec. 3. Sections 15E.201 through 15E.211, Code 2005, are
1 32 repealed.
1 33 Sec. 100. REPAYMENT OF IOWA AGRICULTURAL INDUSTRY FINANCE
1 34 LOAN MONEYS == ALLOCATION OF MONEYS.
1 35 1. As used in this section, unless the context otherwise
2 1 requires:
2 2 a. "Biodiesel" means the end product achieved through a
2 3 chemical process which produces monoalkyl esters of long chain
2 4 fatty acids derived from plant or animal matter for use in
2 5 diesel=powered engines that meets all of the following
2 6 requirements:
2 7 (1) The registration requirements for fuels and fuel
2 8 additives established by the United States environmental
2 9 protection agency under 42 U.S.C. } 7545.
2 10 (2) Compliance with the specifications of ASTM (American
2 11 society for testing and materials) international designation
2 12 D=5798=99.
2 13 b. "E=85 blended gasoline" means a petroleum product that
2 14 is gasoline or natural gasoline blended with agriculturally
2 15 derived ethanol which has been denatured, if the petroleum
2 16 product typically contains eighty=five percent ethanol by
2 17 volume but at least contains seventy percent ethanol by
2 18 volume.
2 19 c. "Off=site terminal facility" means a distillate fuel
2 20 storage distribution facility which is used to supply
2 21 biodiesel through an automated system and which is located
2 22 within close proximity of a major pipeline terminal.
2 23 d. "Renewable fuel" means an energy source which is
2 24 derived from a biomass that is an organic compound available
2 25 on a renewable or recurring basis, including but not limited
2 26 to agricultural crops, if the biomass when processed may be
2 27 used alone or blended with another product to power machinery,
2 28 including an engine or power plant. "Renewable fuel" includes
2 29 but is not limited to biodiesel or "E=85 blended gasoline".
2 30 e. "Service station" means a geographic location where a
2 31 retail dealer as defined in section 214A.1 operates a metered
2 32 pump at a service station for purposes of selling and
2 33 dispensing motor vehicle fuel as defined in section 214A.1 on
2 34 a retail basis.
2 35 2. This section applies to those moneys appropriated to
3 1 the department of economic development pursuant to section
3 2 423.24, subsection 1, paragraph "a", subparagraph (2), Code
3 3 Supplement 1997, which have been awarded as an Iowa
3 4 agricultural industry finance loan to an Iowa agricultural
3 5 industry finance corporation as provided in section 15E.208,
3 6 Code 2005. Notwithstanding any provision of law or provision
3 7 of an agreement executed by the department and another person
3 8 to the contrary, all of the following shall apply to such
3 9 loan:
3 10 a. The corporation shall not provide any financing to a
3 11 person as provided in section 15E.209, Code 2005, from the
3 12 remaining principal balance of the Iowa agricultural industry
3 13 finance loan.
3 14 b. The corporation shall repay the department the
3 15 remaining principal balance of the Iowa agricultural industry
3 16 finance loan by October 1, 2005. The remaining principal
3 17 balance of the loan equals twenty=one million five hundred
3 18 seventeen thousand two hundred thirty=nine dollars. The
3 19 office of the attorney general shall provide the department
3 20 with all necessary assistance required to recover the
3 21 remaining principal balance.
3 22 c. The department shall immediately allocate the moneys
3 23 repaid as the remaining principal balance of the Iowa
3 24 agricultural industry finance loan as follows:
3 25 (1) Ten percent shall be deposited into the value=added
3 26 agricultural products and processes financial assistance fund
3 27 created in section 15E.112.
3 28 (2) Ninety percent shall be allocated by the department to
3 29 support renewable fuel infrastructure cost=share programs as
3 30 follows:
3 31 (a) An E=85 infrastructure cost=share program to provide
3 32 financial incentives for the installation or conversion of
3 33 infrastructure related to equipment or devices used by service
3 34 stations to sell and dispense E=85 blended gasoline.
3 35 (b) A biodiesel infrastructure cost=share program to
4 1 provide financial incentives for the installation or
4 2 conversion of infrastructure required to establish off=site
4 3 terminal facilities used for the distribution of biodiesel.
4 4 The financial incentives provided under this subparagraph
4 5 (2) shall not exceed fifty percent of the estimated cost or
4 6 fifty percent of the actual cost, whichever is less, of
4 7 installing the necessary infrastructure located at a service
4 8 station or off=site terminal facility. The moneys shall not
4 9 be used to pay for expenses incurred by the department in
4 10 administering the programs. In awarding the financial
4 11 incentives, the department may cooperate with the office of
4 12 renewable fuels and coproducts pursuant to section 159A.3.
4 13 Notwithstanding section 8.33, any unobligated or unexpended
4 14 moneys available on June 30 of a fiscal year shall not revert
4 15 but shall be retained by the department to carry out the
4 16 renewable fuel infrastructure cost=share programs.
4 17 Sec. 4. EFFECTIVE DATES.
4 18 1. Section 100 of this Act, being deemed of immediate
4 19 importance, takes effect upon enactment.
4 20 2. The amendments to the following provisions by this Act
4 21 take effect October 2, 2005:
4 22 a. Section 10C.3, unnumbered paragraph 1.
4 23 b. Section 12C.6A, subsection 4, paragraph "g".
4 24 3. The repeal of sections 15E.201 through 15E.211, Code
4 25 2005, by this Act take effect October 2, 2005.
4 26 EXPLANATION
4 27 This bill eliminates provisions in Code chapter 15E,
4 28 division XIX, known as the Iowa agricultural industry finance
4 29 Act and originally enacted by the general assembly in 1998
4 30 (see 1998 Iowa Acts, ch. 1207). The legislation appropriated
4 31 $25 million from moneys to be deposited into the road use tax
4 32 fund. The moneys were diverted to the department of economic
4 33 development, subject to repayment to the road use tax fund.
4 34 The moneys were appropriated for purposes of making a loan to
4 35 an Iowa agricultural industry finance corporation
5 1 (corporation) pursuant to an agreement. The corporation in
5 2 turn was authorized to extend financing to eligible persons
5 3 engaged in specific agricultural industrial ventures (an
5 4 agricultural products processor or an agricultural
5 5 biotechnology enterprise). The corporation was required to
5 6 repay the department $1 million (4 percent of the total amount
5 7 of the loan) each year for 25 years. In 2004 the general
5 8 assembly deferred the repayment schedule. The corporation
5 9 must begin repaying the amount of the principal balance to the
5 10 department beginning October 1, 2007 (2004 Iowa Acts, ch.
5 11 1175). Moreover, in 2003 the principal balance owing was
5 12 reduced when the general assembly authorized the department to
5 13 accept an assignment of a loan made by the corporation to an
5 14 eligible person for a special project. The recipient is
5 15 required to repay the amount that the department would have
5 16 received from the corporation. The legislation also provided
5 17 that the department has no right of recourse against the
5 18 corporation for amounts that are not collected under the loan
5 19 assignment (2003 Iowa Acts, ch. 122). The remaining principal
5 20 balance of the loan equals $21,517,239.
5 21 The bill provides for the recapture of the remaining
5 22 principal balance of the original loan. It suspends the
5 23 authority of the corporation to extend financing to eligible
5 24 persons using the remaining principal amount of the loan. The
5 25 bill accelerates the corporation's repayment obligation, by
5 26 requiring that it satisfy its entire obligation by October 1,
5 27 2005. It requires the office of attorney general to assist
5 28 the department. The bill also requires the department to
5 29 deposit 10 percent of the repaid amount into the value=added
5 30 agricultural products and processes financial assistance fund
5 31 created in Code section 15E.112. Ninety percent of the moneys
5 32 is to be allocated by the department for programs benefiting
5 33 biodiesel and E=85 blended gasoline.
5 34 The bill establishes a cost=share program to provide
5 35 financial incentives for the installation or conversion of
6 1 infrastructure used by service stations to sell and dispense
6 2 E=85 blended gasoline. It also establishes a cost=share
6 3 program to provide financial incentives for the installation
6 4 or conversion of infrastructure required to establish off=site
6 5 terminal facilities that distribute biodiesel.
6 6 Generally, the bill takes effect upon enactment. However,
6 7 the bill also provides that provisions repealing and referring
6 8 to the Iowa agricultural industry finance Act are repealed
6 9 October 2, 2005.
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