HSB 63 (LSB 1272XD (5) 85)

SENATE/HOUSE FILE _____

BY  (PROPOSED ECONOMIC DEVELOPMENT AUTHORITY BILL)

A BILL FOR

An Act relating to the termination of the targeted small business financial assistance program and making appropriations for assistance to targeted small businesses.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I

TARGETED SMALL BUSINESS FINANCIAL ASSISTANCE PROGRAM
    Section 1.  Section 8.6, subsection 12, Code 2013, is amended to read as follows:
   12.  Targeted small businesses.  To assist the director of the economic development authority as requested in the establishment and implementation of the Iowa targeted small business procurement Act and the targeted small business loan guarantee program.
    Sec. 2.  Section 15.107B, subsection 2, paragraph c, Code 2013, is amended by striking the paragraph.
    Sec. 3.  Section 15.108, subsection 7, paragraph c, unnumbered paragraph 1, Code 2013, is amended to read as follows:
   Aid for the development and implementation of the Iowa targeted small business procurement Act established in sections 73.15 through 73.21 and the targeted small business financial assistance program established in section 15.247.
    Sec. 4.  Section 15.108, subsection 7, paragraph c, subparagraph (1), subparagraph division (c), Code 2013, is amended by striking the subparagraph division.
    Sec. 5.  Section 15.108, subsection 7, paragraph c, subparagraphs (3) and (5), Code 2013, are amended by striking the subparagraphs.
    Sec. 6.  Section 15.240, subsection 2, paragraph f, Code 2013, is amended by striking the paragraph.
    Sec. 7.  Section 15.313, subsection 2, paragraph c, Code 2013, is amended by striking the paragraph.
    Sec. 8.  Section 73.20, Code 2013, is amended to read as follows:
   73.20  Determination of ability to perform.
   Before announcing a contract award pursuant to the targeted small business procurement goal program, the purchasing authority shall evaluate whether the targeted small business scheduled to receive the award is able to perform the contract. This determination shall include consideration of production and financial capacity and technical competence. If the purchasing authority determines that the targeted small business may be unable to perform, the director of the economic development authority shall be notified and shall assist the targeted small business pursuant to section 15.108, subsection 7, paragraph “c”, subparagraph (3).
    Sec. 9.  REPEAL.  Section 15.247, Code 2013, is repealed.
    Sec. 10.  TRANSITION UPON REPEAL.
   1.  Upon repeal of the targeted small business financial assistance program established in section 15.247, the authority shall transfer all unencumbered and unobligated moneys accruing to the authority pursuant to existing agreements to a fund established by the authority in the state treasury under the control of the authority pursuant to section 15.106A, subsection 1, paragraph “o”, to be used for the purposes of administering economic development programs in chapter 15, chapter 15E, or another targeted small business assistance program as may be authorized by law.
   2.  Loan payments or repayments and recaptures of principal, interest, or other moneys accruing to the authority on or after June 30, 2013, pursuant to an agreement under section 15.247, shall be transferred to a fund established by the authority in the state treasury under the control of the authority pursuant to section 15.106A, subsection 1, paragraph “o”.

DIVISION II

TARGETED SMALL BUSINESS APPROPRIATION
    Sec. 11.  TARGETED SMALL BUSINESSES.  There is appropriated from the general fund of the state to the economic development authority for the fiscal year beginning July 1, 2013, and ending June 30, 2014, the following amount, or so much thereof as is necessary, to be used for the purposes designated in this section:
   For the services of a qualified microloan service provider to provide financial and technical assistance to targeted small businesses in Iowa:
.................................................. $    250,000
   1.  The authority shall enter into an agreement with a microloan service provider for the provision of services to targeted small businesses. In engaging the services of a qualified microloan service provider, the authority shall require the service provider to offer financial and technical assistance to targeted small businesses at a discounted rate. The authority shall ensure that the moneys appropriated pursuant to this section are used to subsidize the provision of financial and technical assistance by the microloan service provider to targeted small businesses in order for the microloan service provider to offer its services at a discounted rate.
   2.  The authority shall, upon completion of the terms of the agreement with the microloan service provider, submit a report to the general assembly and the governor’s office regarding the results achieved by the service provider and shall make recommendations as to whether the state should continue to appropriate funds for future fiscal years for the purpose of providing financial and technical assistance to targeted small businesses through the services of a microloan service provider.
   3.  For purposes of this section, “targeted small business” means the same as defined in section 15.102.
   4.  Notwithstanding section 8.33, moneys appropriated in this section that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   5.  Notwithstanding section 12C.7, subsection 2, earnings or interest on moneys deposited in a fund shall be credited to the fund. 
EXPLANATION
   This bill terminates the targeted small business financial assistance program and appropriates moneys to the economic development authority for the services of a microloan service provider to assist targeted small businesses.
   Division I of the bill repeals the targeted small business financial assistance program. The Code defines a targeted small business as a small business that is 51 percent or more owned, operated, and actively managed by a minority person, a person with a disability, or a woman. A targeted small business must also be located in the state, operated for profit, and have an average annual gross income of less than $4 million over the three preceding fiscal years. The targeted small business financial assistance program is a program that provides loan-based financing and grants to eligible targeted small businesses through the strategic investment fund created in Code section 15.313. The bill terminates the targeted small business financial assistance program, as well as the program’s board, and the targeted small business advocate service provider which provided mentoring, outreach, and professional development services to certified targeted small businesses.
   The bill allows the economic development authority, upon repeal of the program, to transfer all unencumbered and unobligated moneys as well as loan payments or repayments and recaptures of principal, interest, or other moneys accruing from an existing agreement entered into under the targeted small business financial assistance program to a fund established by the economic development authority.
   Division II of the bill appropriates $250,000 from the general fund to the economic development authority for the services of a qualified microloan service provider to provide financial and technical assistance to targeted small businesses.
   The bill provides that the economic development authority shall enter into an agreement with a microloan service provider for the provision of financial and technical services to targeted small businesses. The economic development authority shall require that the microloan service provider offer such assistance to targeted small businesses at a discounted rate, and the moneys appropriated to the economic development authority shall be used to enable the microloan service provider to offer that discounted rate.
   The bill requires the economic development authority to submit a report to the governor and the general assembly with the results achieved by the service provider and recommendations as to whether the state should continue to appropriate funds for future fiscal years for the purpose of providing assistance to targeted small businesses through a microloan service provider.