S.F. 2255 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 5227SV (2) 84 je/rj 1/ 5

S.F. 2255 (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 and 6 technology, business accelerators, business incubators, or 7 the John Pappajohn entrepreneurial centers. An individual 8 shall not be approved for a self-employment assistance 9 allowance unless the department finds the individual’s initial 10 business plan feasible and financially viable. Upon request, 11 the department shall advise an individual as to resources 12 available in the state to aid in the development of a feasible, 13 financially viable, initial business plan. 14 (5) The individual has obtained any occupational 15 certification or license necessary to carry out the 16 individual’s initial business plan prior to the submission of 17 an application form and an initial business plan. 18 (6) The individual has filed a weekly claim for the 19 self-employment assistance allowance and provides a log of 20 self-employment activities and any other information the 21 director prescribes. 22 b. The self-employment assistance allowance shall be payable 23 to an individual at the same intervals and on the same terms 24 and conditions as regular benefits under this chapter except 25 for the following: 26 (1) The provisions of this chapter regarding being 27 available for work, actively seeking work, and refusing to 28 accept suitable work are not applicable to such an individual. 29 (2) The requirements of this chapter relating to 30 disqualifying income are not applicable to income earned from 31 self-employment by such an individual. 32 c. An individual who meets the requirements of this section 33 shall be considered to be totally unemployed under section 34 96.19, subsection 38, paragraph “a” . 35 -2- LSB 5227SV (2) 84 je/rj 2/ 5

S.F. 2255 d. An individual who fails to actively engage on a full-time 1 basis in self-employment assistance activities is ineligible to 2 receive the self-employment assistance allowance for each week 3 in which such failure occurs. 4 4. Limitation on number of individuals receiving a 5 self-employment assistance allowance. The number of individuals 6 receiving the self-employment assistance allowance at any time 7 shall not exceed five percent of the number of individuals 8 receiving regular benefits. 9 5. Financing the costs of the self-employment assistance 10 allowance. The self-employment assistance allowance shall be 11 charged to employers in the manner provided in this chapter for 12 the charging of regular benefits. 13 6. Implementation. The director shall administer this 14 section in consultation with the small business development 15 centers associated with Iowa state university of science and 16 technology. In adopting rules to administer this section, the 17 director, insofar as is practicable, shall comply with the 18 rules and policies of the United States department of labor. 19 7. Termination date. The authority to pay self-employment 20 assistance allowances under this section terminates at the 21 end of the week preceding the date when federal law no longer 22 authorizes such payment, unless that date is on a Saturday in 23 which case the authority terminates on that date. 24 EXPLANATION 25 This bill establishes a self-employment assistance 26 program which provides unemployment compensation benefits to 27 individuals seeking to be self-employed. These benefits are 28 paid instead of regular unemployment compensation benefits. 29 Authority to establish the program is provided by federal law 30 at 26 U.S.C. § 3306(t). 31 The bill defines self-employment assistance activities 32 and self-employment assistance allowance. Self-employment 33 assistance activities are intended to enable an individual 34 to establish a business and become self-employed and include 35 -3- LSB 5227SV (2) 84 je/rj 3/ 5

S.F. 2255 entrepreneurial training, business counseling, technical 1 assistance, and any other activities approved by the director 2 of the department of workforce development. The bill provides 3 that the weekly self-employment assistance allowance payable to 4 an individual is equal to the weekly benefit amount for regular 5 unemployment benefits and the maximum yearly allowance is the 6 same as the maximum yearly, regular unemployment benefits 7 currently allowable. Charges to employers are made in the 8 same manner as charges to employers for regular unemployment 9 benefits. 10 The bill establishes eligibility requirements for an 11 individual’s acceptance into the self-employment assistance 12 program. An individual must be identified by a worker 13 profiling system as an individual likely to exhaust regular 14 unemployment compensation benefits. An individual must 15 submit an application form and an initial business plan. The 16 department of workforce development, in consultation with a 17 small business development center associated with Iowa state 18 university of science and technology, business accelerators, 19 business incubators, or the John Pappajohn entrepreneurial 20 centers, must review the individual’s initial business plan for 21 feasibility and financial viability. An individual’s initial 22 business plan must be found feasible and financially viable 23 in order for the individual to be accepted into the program. 24 Upon request, the department is to advise an individual as to 25 resources available in the state to aid in the development of 26 a feasible, financially viable, initial business plan. An 27 individual must have obtained any occupational certification 28 or license necessary to carry out the individual’s initial 29 business plan prior to applying for the program. An individual 30 must also file a weekly claim for the self-employment 31 assistance allowance and provide a log of self-employment 32 activities as well as any other information required by the 33 director of the department of workforce development. 34 The bill provides that the requirements to receive regular 35 -4- LSB 5227SV (2) 84 je/rj 4/ 5

S.F. 2255 unemployment benefits relating to availability for work, active 1 search for work, refusal to accept work, and self-employment 2 income do not apply to an individual otherwise eligible to 3 receive a self-employment assistance allowance. The bill 4 provides that an individual who fails to actively engage in 5 self-employment assistance activities full-time is ineligible 6 to receive the self-employment assistance allowance for each 7 week such a failure occurs. 8 The bill provides that the maximum number of individuals 9 eligible for the program at any one time is equal to 5 percent 10 of the individuals receiving regular unemployment benefits. 11 The bill directs the director of the department of workforce 12 development to administer the bill in consultation with a 13 small business development center associated with Iowa state 14 university. The bill also directs the director to comply with 15 the rules and policies of the United States department of 16 labor, where practicable, when adopting rules to implement the 17 bill. 18 The bill is void if federal authorization for the program 19 ends. 20 -5- LSB 5227SV (2) 84 je/rj 5/ 5