Senate File 2041 - Introduced SENATE FILE 2041 BY HATCH , BOLKCOM , DEARDEN , HORN , FRAISE , COURTNEY , KIBBIE , McCOY , QUIRMBACH , BEALL , MATHIS , DANIELSON , DVORSKY , DOTZLER , RIELLY , JOCHUM , HANCOCK , SCHOENJAHN , SENG , BOWMAN , HOGG , BLACK , and SODDERS A BILL FOR An Act establishing a self-employment assistance program 1 for recipients of unemployment compensation benefits and 2 providing a termination date. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5227XS (4) 84 je/rj

S.F. 2041 Section 1. NEW SECTION . 96.45 Self-employment assistance 1 program. 2 1. Definitions. As used in this section, unless the context 3 otherwise requires: 4 a. “Self-employment assistance activities” means activities 5 approved by the director in which an individual participates 6 for the purpose of establishing a business and becoming 7 self-employed. Self-employment assistance activities include 8 but are not limited to entrepreneurial training, business 9 counseling, and technical assistance. 10 b. “Self-employment assistance allowance” means an amount 11 payable in lieu of regular benefits under this chapter to 12 an individual participating in self-employment assistance 13 activities in accordance with this section. Self-employment 14 assistance allowance amounts shall be paid from the 15 unemployment compensation fund. 16 2. Self-employment assistance allowance —— amount. The 17 weekly amount of the self-employment assistance allowance 18 payable to an individual is equal to the weekly regular benefit 19 amount. The sum of the self-employment assistance allowance 20 paid under this section and the regular benefits paid under 21 this chapter with respect to any benefit year shall not 22 exceed the maximum benefit amount payable under section 96.3, 23 subsection 5, with respect to that benefit year. 24 3. Eligibility requirements. The following eligibility 25 requirements apply to the payment of a self-employment 26 assistance allowance under this section. 27 a. An individual may receive a self-employment assistance 28 allowance if the following requirements are met: 29 (1) The individual is eligible to receive regular benefits 30 or would be eligible to receive regular benefits except for the 31 requirements described in paragraph “b” , subparagraphs (1) and 32 (2). 33 (2) The individual is identified by a worker profiling 34 system as an individual likely to exhaust regular benefits. 35 -1- LSB 5227XS (4) 84 je/rj 1/ 5

S.F. 2041 (3) The individual has submitted an application form and an 1 initial business plan as prescribed by the director. 2 (4) The individual’s initial business plan has been 3 reviewed for feasibility and financial viability by the 4 department in consultation with a small business development 5 center associated with Iowa state university of science 6 and technology. An individual shall not be approved for a 7 self-employment assistance allowance unless the department 8 finds the individual’s initial business plan feasible and 9 financially viable. Upon request, the department shall advise 10 an individual as to resources available in the state to aid 11 in the development of a feasible, financially viable, initial 12 business plan. 13 (5) The individual has obtained any occupational 14 certification or license necessary to carry out the 15 individual’s initial business plan prior to the submission of 16 an application form and an initial business plan. 17 (6) The individual has filed a weekly claim for the 18 self-employment assistance allowance and provides a log of 19 self-employment activities and any other information the 20 director prescribes. 21 b. The self-employment assistance allowance shall be payable 22 to an individual at the same intervals and on the same terms 23 and conditions as regular benefits under this chapter except 24 for the following: 25 (1) The provisions of this chapter regarding being 26 available for work, actively seeking work, and refusing to 27 accept suitable work are not applicable to such an individual. 28 (2) The requirements of this chapter relating to 29 disqualifying income are not applicable to income earned from 30 self-employment by such an individual. 31 c. An individual who meets the requirements of this section 32 shall be considered to be totally unemployed under section 33 96.19, subsection 38, paragraph “a” . 34 d. An individual who fails to actively engage on a full-time 35 -2- LSB 5227XS (4) 84 je/rj 2/ 5

S.F. 2041 basis in self-employment assistance activities is ineligible to 1 receive the self-employment assistance allowance for each week 2 in which such failure occurs. 3 4. Limitation on number of individuals receiving a 4 self-employment assistance allowance. The number of individuals 5 receiving the self-employment assistance allowance at any time 6 shall not exceed five percent of the number of individuals 7 receiving regular benefits. 8 5. Financing the costs of the self-employment assistance 9 allowance. The self-employment assistance allowance shall be 10 charged to employers in the manner provided in this chapter for 11 the charging of regular benefits. 12 6. Implementation. The director shall administer this 13 section in consultation with the small business development 14 centers associated with Iowa state university of science and 15 technology. In adopting rules to administer this section, the 16 director, insofar as is practicable, shall comply with the 17 rules and policies of the United States department of labor. 18 7. Termination date. The authority to pay self-employment 19 assistance allowances under this section terminates at the 20 end of the week preceding the date when federal law no longer 21 authorizes such payment, unless that date is on a Saturday in 22 which case the authority terminates on that date. 23 EXPLANATION 24 This bill establishes a self-employment assistance 25 program which provides unemployment compensation benefits to 26 individuals seeking to be self-employed. These benefits are 27 paid instead of regular unemployment compensation benefits. 28 Authority to establish the program is provided by federal law 29 at 26 U.S.C. § 3306(t). 30 The bill defines self-employment assistance activities 31 and self-employment assistance allowance. Self-employment 32 assistance activities are intended to enable an individual 33 to establish a business and become self-employed and 34 include entrepreneurial training, business counseling, 35 -3- LSB 5227XS (4) 84 je/rj 3/ 5

S.F. 2041 technical assistance, and any other activities approved by 1 the labor commissioner. The bill provides that the weekly 2 self-employment assistance allowance payable to an individual 3 is equal to the weekly benefit amount for regular unemployment 4 benefits and the maximum yearly allowance is the same as 5 the maximum yearly, regular unemployment benefits currently 6 allowable. Charges to employers are made in the same manner as 7 charges to employers for regular unemployment benefits. 8 The bill establishes eligibility requirements for an 9 individual’s acceptance into the self-employment assistance 10 program. An individual must be identified by a worker 11 profiling system as an individual likely to exhaust regular 12 unemployment compensation benefits. An individual must 13 submit an application form and an initial business plan. 14 The department of workforce development, in consultation 15 with a small business development center associated with 16 Iowa state university of science and technology, must review 17 the individual’s initial business plan for feasibility and 18 financial viability. An individual’s initial business plan 19 must be found feasible and financially viable in order for the 20 individual to be accepted into the program. Upon request, 21 the department is to advise an individual as to resources 22 available in the state to aid in the development of a feasible, 23 financially viable, initial business plan. An individual 24 must have obtained any occupational certification or license 25 necessary to carry out the individual’s initial business 26 plan prior to applying for the program. An individual must 27 also file a weekly claim for the self-employment assistance 28 allowance and provide a log of self-employment activities as 29 well as any other information required by the director of the 30 department of workforce development. 31 The bill provides that the requirements to receive regular 32 unemployment benefits relating to availability for work, active 33 search for work, refusal to accept work, and self-employment 34 income do not apply to an individual otherwise eligible to 35 -4- LSB 5227XS (4) 84 je/rj 4/ 5

S.F. 2041 receive a self-employment assistance allowance. The bill 1 provides that an individual who fails to actively engage in 2 self-employment assistance activities full-time is ineligible 3 to receive the self-employment assistance allowance for each 4 week such a failure occurs. 5 The bill provides that the maximum number of individuals 6 eligible for the program at any one time is equal to 5 percent 7 of the individuals receiving regular unemployment benefits. 8 The bill directs the director of the department of workforce 9 development to administer the bill in consultation with a 10 small business development center associated with Iowa state 11 university. The bill also directs the director to comply with 12 the rules and policies of the United States department of 13 labor, where practicable, when adopting rules to implement the 14 bill. 15 The bill is void if federal authorization for the program 16 ends. 17 -5- LSB 5227XS (4) 84 je/rj 5/ 5