House File 502 - Introduced HOUSE FILE BY STAED and THOMAS Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act creating an Iowa community entrepreneurial program and 2 fund and making appropriations. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2504HH 82 5 tm/je/5 PAG LIN 1 1 Section 1. NEW SECTION. 15E.331 SHORT TITLE. 1 2 This division shall be known as and may be cited as the 1 3 "Iowa Community Entrepreneurial Act". 1 4 Sec. 2. NEW SECTION. 15E.332 IOWA COMMUNITY 1 5 ENTREPRENEURIAL PROGRAM. 1 6 1. The department shall establish and administer an Iowa 1 7 community entrepreneurial program to assist small businesses 1 8 in areas of the state which experience an economic growth rate 1 9 that is less than the average economic growth rate for the 1 10 state. The department shall provide assistance from the Iowa 1 11 community entrepreneurial fund created in section 15E.334 to 1 12 eligible businesses in the form of loans and forgivable loans. 1 13 The Iowa economic development board shall approve or deny each 1 14 award of assistance under the program. 1 15 2. Loans or forgivable loans awarded under the program 1 16 shall not exceed a term of seven years. 1 17 3. In reviewing applications for assistance, the 1 18 department shall give additional consideration or additional 1 19 points to applicants that demonstrate any of the following: 1 20 a. Business plans approved by a business accelerator 1 21 receiving financial assistance under the business accelerator 1 22 program established in section 15E.351. 1 23 b. Counseling received from a business accelerator 1 24 receiving financial assistance under the business accelerator 1 25 program established in section 15E.351. 1 26 c. Counseling received from a small business development 1 27 center. 1 28 d. Counseling received through an internet=based program 1 29 to assist and stimulate entrepreneurial activity in rural 1 30 areas of the state administered by the university of northern 1 31 Iowa. 1 32 e. Infrastructure of the business certified by the 1 33 leadership in energy and environmental design green building 1 34 rating system or utilizing renewable energy. 1 35 f. The business is a targeted industry business as defined 2 1 in section 15E.223. 2 2 g. Location or expansion in an enterprise zone certified 2 3 pursuant to section 15E.194. 2 4 4. A county may exempt from all property taxation all or a 2 5 portion of the value added to the property upon which an 2 6 eligible business locates or expands and which is used in the 2 7 operation of the eligible business. The amount of value added 2 8 for purposes of this subsection shall be the amount of the 2 9 increase in assessed valuation of the property following the 2 10 location or expansion of the business. The exemption may be 2 11 allowed for a period not to exceed ten years beginning the 2 12 year the eligible business locates or expands operations in 2 13 the county. 2 14 5. If a recipient of assistance under the program fails to 2 15 maintain the requirements to be an eligible business under 2 16 section 15E.333, the recipient is subject to repayment of all 2 17 or a portion of the assistance. 2 18 Sec. 3. NEW SECTION. 15E.333 ELIGIBLE BUSINESSES. 2 19 1. A business is eligible to receive assistance under the 2 20 Iowa community entrepreneurial program if the department finds 2 21 the business meets all of the following: 2 22 a. Is locating or expanding in a county with a population 2 23 of twenty=five thousand or less based on the 2000 census. 2 24 b. Has fifty or fewer employees. 2 25 c. Creates at least two new jobs. 2 26 d. Pays new employees an average wage that is equal to or 2 27 greater than one hundred ten percent of the average county 2 28 wage for the specific job field based on data provided by the 2 29 department of workforce development. 2 30 2. An eligible business shall have not more than one year 2 31 to meet the job creation and wage requirements provided in 2 32 subsection 1. 2 33 Sec. 4. NEW SECTION. 15E.334 IOWA COMMUNITY 2 34 ENTREPRENEURIAL FUND. 2 35 1. An Iowa community entrepreneurial fund is created in 3 1 the state treasury under the control of the department and 3 2 consisting of any moneys appropriated by the general assembly 3 3 and any other moneys available to and obtained or accepted by 3 4 the department for placement in the fund. 3 5 2. Payments of interest, repayments of moneys loaned 3 6 pursuant to this part, and recaptures of loans shall be 3 7 deposited in the fund. 3 8 3. The fund shall be used to provide loans and forgivable 3 9 loans under the Iowa community entrepreneurial program 3 10 established in section 15E.332. 3 11 4. Moneys in the fund are not subject to section 8.33. 3 12 Notwithstanding section 12C.7, interest or earnings on moneys 3 13 in the fund shall be credited to the fund. 3 14 Sec. 5. NEW SECTION. 15E.335 APPROPRIATIONS. 3 15 1. For the fiscal period beginning July 1, 2007, and 3 16 ending June 30, 2012, there is appropriated from the general 3 17 fund of the state to the department of economic development 3 18 two million six hundred fifty thousand dollars each fiscal 3 19 year for deposit in the Iowa community entrepreneurial fund 3 20 created in section 15E.334. 3 21 2. For the fiscal period beginning July 1, 2007, and 3 22 ending June 30, 2012, there is appropriated from the general 3 23 fund of the state to the university of northern Iowa three 3 24 hundred fifty thousand dollars each fiscal year for purposes 3 25 of an internet=based program to assist and stimulate 3 26 entrepreneurial activity in rural areas of the state. 3 27 EXPLANATION 3 28 This bill creates an Iowa community entrepreneurial program 3 29 and fund. 3 30 The bill requires the department of economic development to 3 31 establish and administer an Iowa community entrepreneurial 3 32 program to assist small businesses in areas of the state which 3 33 experience an economic growth rate that is less than the 3 34 average economic growth rate for the state. The bill provides 3 35 that the department shall provide assistance from the Iowa 4 1 community entrepreneurial fund to eligible businesses in the 4 2 form of loans and forgivable loans. The bill provides that 4 3 loans or forgivable loans awarded under the program shall not 4 4 exceed a term of seven years. The bill provides that, in 4 5 reviewing applications for assistance, the department shall 4 6 give additional consideration or additional points to 4 7 applicants that demonstrate certain criteria. 4 8 The bill allows a county to exempt from all property 4 9 taxation all or a portion of the value added to the property 4 10 upon which an eligible business locates or expands and which 4 11 is used in the operation of the eligible business. The bill 4 12 provides that the amount of value added for these purposes 4 13 shall be the amount of the increase in assessed valuation of 4 14 the property following the location or expansion of the 4 15 business. The bill provides that the exemption may be allowed 4 16 for a period not to exceed 10 years beginning the year the 4 17 eligible business locates or expands operations in the county. 4 18 The bill provides that, if a recipient of assistance under 4 19 the program fails to maintain the requirements to be an 4 20 eligible business, the recipient is subject to repayment of 4 21 all or a portion of the assistance. 4 22 The bill provides that a business is eligible to receive 4 23 assistance under the Iowa community entrepreneurial program if 4 24 the department finds the business is locating or expanding in 4 25 a county with a population of 25,000 or less based on the 2000 4 26 census, has 50 or fewer employees, creates at least two new 4 27 jobs, and pays new employees an average wage that is equal to 4 28 or greater than 110 percent of the average county wage for the 4 29 specific job field based on data provided by the department of 4 30 workforce development. The bill provides that an eligible 4 31 business shall have not more than one year to meet the job 4 32 creation and wage requirements for being an eligible business. 4 33 The bill creates an Iowa community entrepreneurial fund in 4 34 the state treasury under the control of the department and 4 35 consisting of any moneys appropriated by the general assembly 5 1 and any other moneys available to and obtained or accepted by 5 2 the department for placement in the fund. The bill provides 5 3 that the fund shall be used to provide loans and forgivable 5 4 loans under the Iowa community entrepreneurial program. 5 5 For the fiscal period beginning July 1, 2007, and ending 5 6 June 30, 2012, the bill appropriates from the general fund of 5 7 the state to the department of economic development $2,650,000 5 8 each fiscal year for deposit in the Iowa community 5 9 entrepreneurial fund. For the fiscal period beginning July 1, 5 10 2007, and ending June 30, 2012, the bill appropriates from the 5 11 general fund of the state to the university of northern Iowa 5 12 $350,000 each fiscal year for purposes of an internet=based 5 13 program to assist and stimulate entrepreneurial activity in 5 14 rural areas of the state. 5 15 LSB 2504HH 82 5 16 tm:rj/je/5