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: 4 TLSB 2504HV 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 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. 5 25 LSB 2504HV 82 5 26 tm:rj/je/5