H.F. 2106 Section 1. NEW SECTION . 15.321 Entrepreneur 1 micro-assistance grant program. 2 1. The authority shall establish and administer an 3 entrepreneur micro-assistance grant program. The entrepreneur 4 micro-assistance grant program is established to provide 5 grants to first-time entrepreneurs. Financial assistance 6 under the program shall be provided from the entrepreneur 7 micro-assistance fund created in section 15.322. 8 2. a. The authority shall designate a local economic 9 development entity to administer the grant program as provided 10 in this section. 11 b. In designating a local economic development entity, the 12 authority may consider: 13 (1) The local economic development entity’s relationship 14 to the community. 15 (2) The local economic development entity’s status as a 16 not-for-profit single management company, local government 17 entity, or other entity. 18 (3) Other information the authority deems relevant. 19 c. The board may accept, reject, or defer a local economic 20 development entity’s application for funds under this section. 21 d. The authority shall enter into an agreement with a 22 local economic development entity designated pursuant to this 23 subsection for purposes of ensuring the program is administered 24 pursuant to the requirements of this section. 25 3. The authority shall allocate funds, not to exceed one 26 hundred thousand dollars to any one local economic development 27 entity, to designated local economic development entities to 28 administer the provisions of this section. 29 4. a. A local economic development entity designated 30 pursuant to this section shall establish a competitive-based 31 grant application process for first-time entrepreneurs. A 32 local economic development entity designated pursuant to 33 this section may accept and evaluate, and approve, deny, or 34 defer applications for financial assistance from first-time 35 -1- LSB 5357YH (4) 84 ad/sc 1/ 6

H.F. 2106 entrepreneurs pursuant to the requirements of this section. 1 b. A local economic development entity designated pursuant 2 to this section shall monitor the compliance of the recipients 3 of the grants awarded under this section with the requirements 4 of subsection 7 by requiring documentation of the use of the 5 award. The entity shall provide this documentation to the 6 authority when received. 7 c. All disbursements of moneys to recipients of a grant 8 awarded under this section by a designated local economic 9 development entity shall be made by the authority. 10 d. All repayments or recaptures and interest on grants 11 awarded under the program shall be remitted to the authority 12 and deposited in the entrepreneur micro-assistance fund. 13 e. The authority, with the assistance of the designated 14 local economic development entity, may seek the recapture 15 of a grant provided pursuant to this section as provided in 16 subsection 8. 17 5. A grant awarded under the program shall be at least 18 two thousand five hundred dollars, but shall not exceed fifty 19 thousand dollars. 20 6. A first-time entrepreneur is eligible to apply for a 21 grant under the program if the entrepreneur meets the following 22 criteria at the time of application: 23 a. The entrepreneur intends to or has located a business in 24 Iowa. 25 b. The entrepreneur has a business plan. 26 c. The entrepreneur’s business would or does only employ 27 individuals legally authorized to work in this state. 28 7. A first-time entrepreneur shall use the awarded moneys 29 for one or more of the following: 30 a. Utility costs. 31 b. Transportation costs. 32 c. Liability insurance costs. 33 d. Property tax payments. 34 8. Upon approval by a designated local economic development 35 -2- LSB 5357YH (4) 84 ad/sc 2/ 6

H.F. 2106 entity of the application for a grant, the first-time 1 entrepreneur shall enter into an agreement with the authority, 2 which shall include but not be limited to all of the following 3 provisions: 4 a. If after receiving financial assistance, an entrepreneur 5 does not continue to meet all of the criteria for eligibility 6 as provided in subsection 6, all or a portion of the financial 7 assistance received is subject to disallowance, recapture, or 8 immediate repayment. 9 b. If an entrepreneur, after receiving financial assistance, 10 fails to use the awarded moneys as provided in subsection 11 7, all or a portion of the financial assistance received is 12 subject to disallowance, recapture, or immediate repayment. 13 9. The authority shall adopt rules pursuant to chapter 17A 14 as necessary to administer the program. The authority may 15 adopt emergency rules under section 17A.4, subsection 3, and 16 section 17A.5, subsection 2, paragraph “b” , as necessary for the 17 administration of this section. 18 Sec. 2. NEW SECTION . 15.322 Entrepreneur micro-assistance 19 fund. 20 1. An entrepreneur micro-assistance fund is created in 21 the state treasury under the control of the authority and 22 consisting of any moneys appropriated by the general assembly 23 and any other moneys available to and obtained or accepted by 24 the authority for placement in the fund. 25 2. Payments of interest, repayments of moneys provided, and 26 recaptures of moneys provided shall be deposited in the fund. 27 3. The fund shall be used to provide grants under the 28 entrepreneur micro-assistance program established in section 29 15.321. 30 4. Moneys in the fund are not subject to section 8.33. 31 Notwithstanding section 12C.7, interest or earnings on moneys 32 in the fund shall be credited to the fund. 33 Sec. 3. ENTREPRENEUR MICRO-ASSISTANCE APPROPRIATION. 34 1. There is appropriated from the general fund of the state 35 -3- LSB 5357YH (4) 84 ad/sc 3/ 6

H.F. 2106 to the economic development authority for the fiscal year 1 beginning July 1, 2012, and ending June 30, 2013, the following 2 amount, or so much thereof as is necessary, to be used for the 3 purposes designated: 4 For the purpose of assisting first-time entrepreneurs 5 through the entrepreneur micro-assistance grant program, 6 including salaries, support, maintenance, and miscellaneous 7 purposes: 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000 9 2. Notwithstanding section 8.33, moneys appropriated in 10 this section that remain unencumbered or unobligated at the 11 close of the fiscal year shall not revert but shall remain 12 available for expenditure for the purposes designated. 13 EXPLANATION 14 This bill creates an entrepreneur micro-assistance 15 grant program for first-time entrepreneurs administered by 16 the economic development authority and by local economic 17 development entities. The bill allows a local economic 18 development entity to apply to the economic development 19 authority to administer the program. The authority shall 20 not allocate more than $100,000 to any one local economic 21 development entity. When designating a local economic 22 development entity to administer the grant program, the 23 authority may consider the entity’s relationship to the 24 community, the organizational status of the entity, or other 25 information the authority deems relevant. 26 The bill provides that a designated local economic 27 development entity must enter into an agreement with the 28 authority to ensure the entity administers the grant program 29 pursuant to the statutory requirements. The economic 30 development authority board may accept, reject, or defer a 31 local entity’s application for allocation of funds. 32 The bill provides that a designated local economic 33 development entity shall establish a competitive-based 34 grant application process for first-time entrepreneurs. The 35 -4- LSB 5357YH (4) 84 ad/sc 4/ 6

H.F. 2106 entity may accept and evaluate, and approve, deny, or defer 1 applications pursuant to the statutory requirements. The 2 authority is required to make the disbursements of moneys to 3 recipients approved by a designated local economic development 4 entity. A grant awarded under the bill shall be at least 5 $2,500 but shall not exceed $50,000. 6 The designated local entity shall monitor a grant 7 recipient’s compliance with the statutory requirements by 8 requiring documentation of the use of the award. The local 9 entity shall provide the documentation to the authority. The 10 bill allows the authority, with the assistance of a designated 11 local economic development entity, to seek the recapture of a 12 grant pursuant to the bill. All repayments or recaptures and 13 interest on grants awarded shall be remitted to the authority 14 and deposited in the entrepreneur micro-assistance fund. 15 The bill provides that a first-time entrepreneur is eligible 16 to apply for a grant if the entrepreneur intends to or has 17 started a business in Iowa, has a business plan, and the 18 entrepreneur’s business would or does only employ individuals 19 legally authorized to work in the state. The bill also 20 provides the accepted uses for the grant award. The award 21 shall only be used for utility costs, transportation costs, 22 insurance costs, or property tax payments. 23 Once the local entity approves a grant, the bill provides 24 that the first-time entrepreneur shall enter into an agreement 25 with the authority. That agreement must include but is not 26 limited to provisions concerning the disallowance, recapture, 27 or immediate repayment of all or part of the funds if the 28 entrepreneur does not continue to meet the criteria for 29 eligibility or the entrepreneur fails to use the awarded moneys 30 as required. 31 The bill also creates a fund for the entrepreneur 32 micro-assistance grant program. The fund is under the control 33 of the authority and consists of any moneys appropriated by 34 the general assembly and any other moneys available to and 35 -5- LSB 5357YH (4) 84 ad/sc 5/ 6

H.F. 2106 obtained or accepted by the authority for placement in the 1 fund. Payments of interest, repayments of moneys provided, and 2 recaptures of moneys provided shall be deposited in the fund. 3 The fund shall be used to provide grants under the entrepreneur 4 micro-assistance program. The money in the fund is not subject 5 to reversion of funds or interest. 6 The bill makes an appropriation of $1 million for the fiscal 7 year beginning July 1, 2012, and ending June 30, 2013, for 8 the purpose of assisting first-time entrepreneurs through the 9 entrepreneur micro-assistance grant program. 10 -6- LSB 5357YH (4) 84 ad/sc 6/ 6