House File 867 - Introduced
HOUSE FILE
BY COMMITTEE ON ECONOMIC GROWTH
(SUCCESSOR TO HF 502)
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:
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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 The department shall provide assistance from the Iowa
1 9 community entrepreneurial fund created in section 15E.334 to
1 10 eligible businesses in the form of loans, forgivable loans,
1 11 and technical assistance grants. An applicant shall not
1 12 receive more than two hundred fifty thousand dollars of
1 13 financial assistance in the form of loans or forgivable loans.
1 14 Loans under the program shall be used for business expenses
1 15 and to leverage conventional financing from commercial lenders
1 16 or private investors. Only an applicant locating or expanding
1 17 in a county with a population of twenty=five thousand or less
1 18 based on the 2000 census shall be eligible for financial
1 19 assistance in the form of forgivable loans. A forgivable loan
1 20 shall be based on the number of pledged jobs being created
1 21 within one year from the time an application for financial
1 22 assistance is submitted. An applicant shall not receive more
1 23 than twenty=five thousand dollars in technical assistance
1 24 grants. Loans and technical assistance grants shall not
1 25 exceed fifty percent of the total costs of a project. The
1 26 Iowa economic development board shall approve or deny each
1 27 award of assistance under the program.
1 28 2. Loans or forgivable loans awarded under the program
1 29 shall not exceed a term of seven years.
1 30 3. In reviewing applications for assistance, the
1 31 department shall give additional consideration or additional
1 32 points to applicants that demonstrate any of the following:
1 33 a. Business plans approved by a business accelerator
1 34 receiving financial assistance under the business accelerator
1 35 program established in section 15E.351, as demonstrated by a
2 1 letter of endorsement by the business accelerator.
2 2 b. Counseling received from a business accelerator
2 3 receiving financial assistance under the business accelerator
2 4 program established in section 15E.351, as demonstrated by a
2 5 letter of endorsement by the business accelerator.
2 6 c. Counseling received from a small business development
2 7 center, as demonstrated by a letter of endorsement by the
2 8 small business development center.
2 9 d. Counseling received through an internet=based program
2 10 to assist and stimulate entrepreneurial activity in rural
2 11 areas of the state administered by the university of northern
2 12 Iowa, as demonstrated by a letter of endorsement by the
2 13 university.
2 14 e. Counseling received from a center providing assistance
2 15 to entrepreneurs, as demonstrated by a letter of endorsement
2 16 by the center.
2 17 f. Infrastructure of the business certified by the
2 18 leadership in energy and environmental design green building
2 19 rating system or utilizing renewable energy.
2 20 g. The business is a targeted industry business as defined
2 21 in section 15E.223.
2 22 h. Location or expansion in an enterprise zone certified
2 23 pursuant to section 15E.194.
2 24 4. A county may exempt from all property taxation all or a
2 25 portion of the value added to the property upon which an
2 26 eligible business locates or expands and which is used in the
2 27 operation of the eligible business. The amount of value added
2 28 for purposes of this subsection shall be the amount of the
2 29 increase in assessed valuation of the property following the
2 30 location or expansion of the business. The exemption may be
2 31 allowed for a period not to exceed ten years beginning the
2 32 year the eligible business locates or expands operations in
2 33 the county.
2 34 5. If a recipient of assistance under the program fails to
2 35 maintain the requirements to be an eligible business under
3 1 section 15E.333, the recipient is subject to repayment of all
3 2 or a portion of the assistance.
3 3 Sec. 3. NEW SECTION. 15E.333 ELIGIBLE BUSINESSES.
3 4 1. A business is eligible to receive assistance under the
3 5 Iowa community entrepreneurial program if the department finds
3 6 the business meets all of the following:
3 7 a. Has fifty or fewer employees.
3 8 b. Creates at least two new jobs.
3 9 c. Pays new employees an average wage that is equal to or
3 10 greater than one hundred percent of the average county wage or
3 11 one hundred percent of the average regional wage, whichever is
3 12 lower.
3 13 d. Is not a retail business.
3 14 2. An eligible business shall have not more than one year
3 15 to meet the job creation and wage requirements provided in
3 16 subsection 1.
3 17 Sec. 4. NEW SECTION. 15E.334 IOWA COMMUNITY
3 18 ENTREPRENEURIAL FUND.
3 19 1. An Iowa community entrepreneurial fund is created in
3 20 the state treasury under the control of the department and
3 21 consisting of any moneys appropriated by the general assembly
3 22 and any other moneys available to and obtained or accepted by
3 23 the department for placement in the fund.
3 24 2. Payments of interest, repayments of moneys loaned
3 25 pursuant to this part, and recaptures of loans shall be
3 26 deposited in the fund.
3 27 3. The fund shall be used to provide loans and forgivable
3 28 loans under the Iowa community entrepreneurial program
3 29 established in section 15E.332.
3 30 4. Moneys in the fund are not subject to section 8.33.
3 31 Notwithstanding section 12C.7, interest or earnings on moneys
3 32 in the fund shall be credited to the fund.
3 33 Sec. 5. NEW SECTION. 15E.335 APPROPRIATIONS.
3 34 For the fiscal period beginning July 1, 2007, and ending
3 35 June 30, 2012, there is appropriated from the general fund of
4 1 the state to the department of economic development two
4 2 million six hundred fifty thousand dollars each fiscal year
4 3 for deposit in the Iowa community entrepreneurial fund created
4 4 in section 15E.334.
4 5 EXPLANATION
4 6 This bill creates an Iowa community entrepreneurial program
4 7 and fund.
4 8 The bill requires the department of economic development to
4 9 establish and administer an Iowa community entrepreneurial
4 10 program to assist small businesses. The bill provides that
4 11 the department shall provide assistance from the Iowa
4 12 community entrepreneurial fund to eligible businesses in the
4 13 form of loans, forgivable loans, and technical assistance
4 14 grants. The bill places limits on the amount of financial
4 15 assistance that an eligible business may receive. The bill
4 16 provides that only applicants locating or expanding in a
4 17 county with a population of 25,000 or less shall be eligible
4 18 for financial assistance in the form of forgivable loans. The
4 19 bill provides that loans or forgivable loans awarded under the
4 20 program shall not exceed a term of seven years. The bill
4 21 provides that, in reviewing applications for assistance, the
4 22 department shall give additional consideration or additional
4 23 points to applicants that demonstrate certain criteria.
4 24 The bill allows a county to exempt from all property
4 25 taxation all or a portion of the value added to the property
4 26 upon which an eligible business locates or expands and which
4 27 is used in the operation of the eligible business. The bill
4 28 provides that the amount of value added for these purposes
4 29 shall be the amount of the increase in assessed valuation of
4 30 the property following the location or expansion of the
4 31 business. The bill provides that the exemption may be allowed
4 32 for a period not to exceed 10 years beginning the year the
4 33 eligible business locates or expands operations in the county.
4 34 The bill provides that, if a recipient of assistance under
4 35 the program fails to maintain the requirements to be an
5 1 eligible business, the recipient is subject to repayment of
5 2 all or a portion of the assistance.
5 3 The bill provides that a business is eligible to receive
5 4 assistance under the Iowa community entrepreneurial program if
5 5 the department finds the business has 50 or fewer employees,
5 6 creates at least two new jobs, pays new employees an average
5 7 wage that is equal to or greater than 100 percent of the
5 8 average county wage or 100 percent of the average regional
5 9 wage, whichever is lower, and is not a retail business. The
5 10 bill provides that an eligible business shall have not more
5 11 than one year to meet the job creation and wage requirements
5 12 for being an eligible business.
5 13 The bill creates an Iowa community entrepreneurial fund in
5 14 the state treasury under the control of the department and
5 15 consisting of any moneys appropriated by the general assembly
5 16 and any other moneys available to and obtained or accepted by
5 17 the department for placement in the fund. The bill provides
5 18 that the fund shall be used to provide loans and forgivable
5 19 loans under the Iowa community entrepreneurial program.
5 20 For the fiscal period beginning July 1, 2007, and ending
5 21 June 30, 2012, the bill appropriates from the general fund of
5 22 the state to the department of economic development $2,650,000
5 23 each fiscal year for deposit in the Iowa community
5 24 entrepreneurial fund.
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