S.F. _____ H.F. _____ DIVISION I 1 IOWA INNOVATION COUNCIL FOUNDATION 2 Section 1. Section 15.117A, subsection 6, Code 2011, is 3 amended by adding the following new paragraph: 4 NEW PARAGRAPH . f. Establish the Iowa innovation council 5 foundation pursuant to section 15.117B and provide an 6 annual report on the foundation’s activities to the economic 7 development board, the governor, and the general assembly. 8 Sec. 2. NEW SECTION . 15.117B Iowa innovation council 9 foundation. 10 1. As used in this section, unless the context otherwise 11 requires: 12 a. “Board” means the board of directors of the foundation as 13 provided in subsection 3. 14 b. “Council” means the Iowa innovation council established 15 pursuant to section 15.117A. 16 c. “Foundation” means the Iowa innovation council foundation 17 established pursuant to subsection 2. 18 d. “Partner” means the same as defined in section 488.102. 19 e. “Targeted industries” means the same as defined in 20 section 15.411. 21 2. a. The council shall establish the Iowa innovation 22 council foundation as a nonprofit corporation organized under 23 chapter 504 and qualifying under section 501(c)(3) of the 24 Internal Revenue Code as an organization exempt from taxation. 25 Unless otherwise provided in this section, the foundation is 26 subject to the provisions of chapter 504. 27 b. The foundation shall be established so that donations and 28 bequests to it qualify as tax deductible under the federal and 29 state income tax laws. 30 c. The foundation shall be established for the purpose of 31 lessening the burdens of government in connection with the 32 public purpose of economic development in Iowa by fostering the 33 creation, growth, and expansion of innovative Iowa enterprises 34 engaged in a diversified range of primary industry sectors that 35 -1- LSB 1264DP (10) 84 tw/sc 1/ 7

S.F. _____ H.F. _____ develop unique technologies, products, services, and supply 1 chains. 2 d. The foundation may receive and expend funds from public 3 and private sources and may use its property, money, or 4 other resources for the purpose of the foundation and for the 5 activities specified in subsections 4 and 5. 6 e. The foundation shall not be considered a state agency 7 and shall not be required to comply with any requirements that 8 apply to a state agency. The foundation shall not exercise any 9 sovereign power of the state. 10 f. The foundation does not have authority to pledge the 11 credit of the state, and the state shall not be liable for 12 the debts or obligations of the foundation. All debts and 13 obligations of the foundation shall be payable solely from the 14 foundation’s funds. 15 3. a. The board of directors of the foundation shall be 16 comprised of the members of the council, and the board shall 17 serve without compensation. 18 b. The chairperson of the board shall be the chief 19 technology officer appointed pursuant to section 15.117. 20 c. The board shall appoint a chief executive officer to 21 manage the foundation. 22 4. The board shall direct and oversee the foundation’s 23 activities and shall act to ensure all of the following: 24 a. That the foundation creates a strategic plan designed 25 to foster entrepreneurship across the state by identifying the 26 preconditions of innovation and aligning those preconditions in 27 ways that provide advantages to Iowa businesses. 28 b. That the foundation focuses its efforts on increasing 29 business innovation that creates permanent economic 30 opportunities and results in long-term economic growth. 31 c. That the foundation serves as a financing resource 32 for Iowa entrepreneurial enterprises by providing financial 33 assistance to such enterprises and by referring such 34 enterprises to private lenders, venture capital investors, 35 -2- LSB 1264DP (10) 84 tw/sc 2/ 7

S.F. _____ H.F. _____ government agencies, and other entities providing financial 1 assistance. 2 d. That the foundation develops a process for evaluating 3 with due diligence the viability of the enterprises receiving 4 financial assistance pursuant to paragraph “c” in order to 5 maximize the return on investment in such enterprises. 6 e. That the foundation creates a mentoring system designed 7 to assist emerging entrepreneurs and accelerate the successful 8 commercialization of marketable technologies and intellectual 9 property. 10 f. That the foundation makes every effort to secure and 11 leverage all available public and private sources of funding 12 for expanding research, innovation, commercialization, and 13 entrepreneurship in the state. 14 g. That the foundation proposes an annual budget that 15 includes funding levels for each of the foundation’s major 16 activities and that shows sufficient moneys are available to 17 support those activities. 18 h. That the foundation provides an annual report on its 19 activities to the council no later than June 30 of each year 20 and that the report does the following: 21 (1) Includes a financial audit conducted in accordance with 22 generally accepted accounting principles. 23 (2) Reviews the innovation and commercialization programs 24 and funding levels in other states and makes recommendations 25 for appropriate funding levels of similar programs in Iowa. 26 (3) Is readily available to the public. 27 5. The foundation may become a partner in a limited 28 partnership if the limited partnership is organized under 29 chapter 488 for the purpose of making investments in targeted 30 industries. 31 DIVISION II 32 APPROPRIATIONS 33 Sec. 3. Section 15.412, Code 2011, is amended by adding the 34 following new subsection: 35 -3- LSB 1264DP (10) 84 tw/sc 3/ 7

S.F. _____ H.F. _____ NEW SUBSECTION . 4. Of the moneys in the fund, the 1 department shall allocate not more than five million dollars 2 for purposes of providing financial assistance to one or 3 more nonprofit organizations organized under chapter 504 and 4 qualifying under section 501(c)(3) of the Internal Revenue Code 5 as organizations exempt from taxation if such organizations 6 have been established for the purpose of lessening the 7 burdens of government in connection with the public purpose 8 of economic development in Iowa by fostering the creation, 9 growth, and expansion of innovative Iowa enterprises engaged in 10 a diversified range of primary industry sectors that develop 11 unique technologies, products, services, and supply chains. 12 Sec. 4. FINANCIAL ASSISTANCE FOR TARGETED 13 INDUSTRIES. There is appropriated from the general fund of 14 the state to the department of economic development for the 15 fiscal year beginning July 1, 2011, and ending June 30, 2012, 16 the following amount, or so much thereof as is necessary, to be 17 used for the purposes designated: 18 For providing financial assistance to one or more 19 enterprises investing in targeted industries: 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000,000 21 To be eligible for financial assistance pursuant to this 22 section, an enterprise shall meet the following criteria: 23 1. The enterprise must be organized as a limited partnership 24 under chapter 488. 25 2. The enterprise must be organized for the following 26 purposes: 27 a. Securing public and private funding sources in order to 28 make investments in Iowa businesses competing in the targeted 29 industries. 30 b. Identifying and recruiting people with the ability to 31 serve as managers and executives of businesses in the targeted 32 industries. 33 c. Generating profits by investing in promising targeted 34 industry business ventures and using such profits to fund 35 -4- LSB 1264DP (10) 84 tw/sc 4/ 7

S.F. _____ H.F. _____ further investments. 1 3. The enterprise must have as a partner a nonprofit 2 corporation organized under chapter 504, and qualifying 3 under section 501(c)(3) of the Internal Revenue Code as an 4 organization exempt from taxation, for the purpose of lessening 5 the burdens of government in connection with the public purpose 6 of economic development in Iowa by fostering the creation, 7 growth, and expansion of innovative Iowa enterprises engaged in 8 a diversified range of primary industry sectors that develop 9 unique technologies, products, services, and supply chains. 10 4. For purposes of this section, “targeted industries” 11 means the same as defined in section 15.411. 12 EXPLANATION 13 This bill provides for the establishment of an Iowa 14 innovation council foundation and makes appropriations to the 15 department of economic development. 16 The bill directs the Iowa innovation council, an agency 17 of state government, to establish a nonprofit organization 18 called the Iowa innovation council foundation. The foundation 19 must be established such that it is exempt from federal 20 income taxation and donations to it are tax deductible. The 21 foundation must be established for the purpose of lessening the 22 burdens of government in connection with the public purpose 23 of economic development in Iowa by fostering the creation, 24 growth, and expansion of innovative Iowa enterprises engaged in 25 a diversified range of primary industry sectors that develop 26 unique technologies, products, services, and supply chains. 27 The foundation is not a state agency, does not have to comply 28 with the requirements of a state agency, and cannot exercise 29 any of the sovereign powers of the state. The foundation 30 does not have authority to pledge the credit of the state, 31 and the state is not liable for the debts or obligations of 32 the foundation which are payable solely from the foundation’s 33 funds. 34 The bill provides that the foundation is governed by a board 35 -5- LSB 1264DP (10) 84 tw/sc 5/ 7

S.F. _____ H.F. _____ of directors comprised of the members of the Iowa innovation 1 council. The chief technology officer of the state is the 2 chairperson of the board. The board must appoint a chief 3 executive officer to manage the foundation. 4 The bill provides that the board must oversee the 5 foundation’s activities and act to ensure that certain 6 activities specified in statute are conducted by the 7 foundation. The foundation must provide an annual report on 8 its activities to the council. The report must be provided no 9 later than June 30 of each year and must include a financial 10 audit, a review of other states’ programs, and recommendations 11 for funding levels in Iowa. The report must be available to 12 the public. 13 The bill provides that the foundation is authorized to 14 become a partner in a limited partnership that is organized for 15 purposes of making investments in targeted industries. 16 The bill directs the department of economic development 17 to allocate up to $5 million for purposes of providing 18 financial assistance to nonprofit organizations that have 19 been established for the purpose of lessening the burdens of 20 government in connection with the public purpose of economic 21 development in Iowa by fostering the creation, growth, 22 and expansion of innovative Iowa enterprises engaged in a 23 diversified range of primary industry sectors that develop 24 unique technologies, products, services, and supply chains. 25 The bill appropriates $25 million from the general fund 26 of the state to the department of economic development for 27 purposes of providing financial assistance to enterprises 28 investing in targeted industries. To be eligible for such 29 assistance, an enterprise must be a limited partnership, be 30 organized for certain investment purposes, and include among 31 its partners a nonprofit organization established for the 32 purpose of lessening the burdens of government in connection 33 with the public purpose of economic development in Iowa by 34 fostering the creation, growth, and expansion of innovative 35 -6- LSB 1264DP (10) 84 tw/sc 6/ 7