SF 17 (LSB 1042XS (2) 85)

SENATE FILE 17

BY  HATCH

A BILL FOR

An Act establishing a self-employment assistance program for recipients of unemployment compensation benefits and providing a termination date.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  96.45  Self-employment assistance program.
   1.  Definitions.  As used in this section, unless the context otherwise requires:
   a.  “Self-employment assistance activities” means activities approved by the director in which an individual participates for the purpose of establishing a business and becoming self-employed. Self-employment assistance activities include but are not limited to entrepreneurial training, business counseling, and technical assistance.
   b.  “Self-employment assistance allowance” means an amount payable in lieu of regular benefits under this chapter to an individual participating in self-employment assistance activities in accordance with this section. Self-employment assistance allowance amounts shall be paid from the unemployment compensation fund.
   2.  Self-employment assistance allowance —— amount.  The weekly amount of the self-employment assistance allowance payable to an individual is equal to the weekly regular benefit amount. The sum of the self-employment assistance allowance paid under this section and the regular benefits paid under this chapter with respect to any benefit year shall not exceed the maximum benefit amount payable under section 96.3, subsection 5, with respect to that benefit year.
   3.  Eligibility requirements.  The following eligibility requirements apply to the payment of a self-employment assistance allowance under this section.
   a.  An individual may receive a self-employment assistance allowance if the following requirements are met:
   (1)  The individual is eligible to receive regular benefits or would be eligible to receive regular benefits except for the requirements described in paragraph “b”, subparagraphs (1) and (2).
   (2)  The individual is identified by a worker profiling system as an individual likely to exhaust regular benefits.

   (3)  The individual has submitted an application form and an initial business plan as prescribed by the director.
   (4)  The individual’s initial business plan has been reviewed for feasibility and financial viability by the department in consultation with a small business development center associated with Iowa state university of science and technology, business accelerators, business incubators, or the John Pappajohn entrepreneurial centers. An individual shall not be approved for a self-employment assistance allowance unless the department finds the individual’s initial business plan feasible and financially viable. Upon request, the department shall advise an individual as to resources available in the state to aid in the development of a feasible, financially viable, initial business plan.
   (5)  The individual has obtained any occupational certification or license necessary to carry out the individual’s initial business plan prior to the submission of an application form and an initial business plan.
   (6)  The individual has filed a weekly claim for the self-employment assistance allowance and provides a log of self-employment activities and any other information the director prescribes.
   b.  The self-employment assistance allowance shall be payable to an individual at the same intervals and on the same terms and conditions as regular benefits under this chapter except for the following:
   (1)  The provisions of this chapter regarding being available for work, actively seeking work, and refusing to accept suitable work are not applicable to such an individual.
   (2)  The requirements of this chapter relating to disqualifying income are not applicable to income earned from self-employment by such an individual.
   c.  An individual who meets the requirements of this section shall be considered to be totally unemployed under section 96.19, subsection 38, paragraph “a”.

   d.  An individual who fails to actively engage on a full-time basis in self-employment assistance activities is ineligible to receive the self-employment assistance allowance for each week in which such failure occurs.
   4.  Limitation on number of individuals receiving a self-employment assistance allowance.  The number of individuals receiving the self-employment assistance allowance at any time shall not exceed five percent of the number of individuals receiving regular benefits.
   5.  Financing the costs of the self-employment assistance allowance.  The self-employment assistance allowance shall be charged to employers in the manner provided in this chapter for the charging of regular benefits.
   6.  Implementation.  The director shall administer this section in consultation with the small business development center associated with Iowa state university of science and technology, business accelerators, business incubators, and the John Pappajohn entrepreneurial centers. In adopting rules to administer this section, the director, insofar as is practicable, shall comply with the rules and policies of the United States department of labor.
   7.  Termination date.  The authority to pay self-employment assistance allowances under this section terminates at the end of the week preceding the date when federal law no longer authorizes such payment, unless that date is on a Saturday in which case the authority terminates on that date.
EXPLANATION
   This bill establishes a self-employment assistance program which provides unemployment compensation benefits to individuals seeking to be self-employed. These benefits are paid instead of regular unemployment compensation benefits. Authority to establish the program is provided by federal law at 26 U.S.C. § 3306(t).
   The bill defines self-employment assistance activities and self-employment assistance allowance. Self-employment assistance activities are intended to enable an individual to establish a business and become self-employed and include entrepreneurial training, business counseling, technical assistance, and any other activities approved by the director of the department of workforce development. The bill provides that the weekly self-employment assistance allowance payable to an individual is equal to the weekly benefit amount for regular unemployment benefits and the maximum yearly allowance is the same as the maximum yearly, regular unemployment benefits currently allowable. Charges to employers are made in the same manner as charges to employers for regular unemployment benefits.
   The bill establishes eligibility requirements for an individual’s acceptance into the self-employment assistance program. An individual must be identified by a worker profiling system as an individual likely to exhaust regular unemployment compensation benefits. An individual must submit an application form and an initial business plan. The department of workforce development, in consultation with a small business development center associated with Iowa state university, business accelerators, business incubators, or the John Pappajohn entrepreneurial centers, must review the individual’s initial business plan for feasibility and financial viability. An individual’s initial business plan must be found feasible and financially viable in order for the individual to be accepted into the program. Upon request, the department is required to advise an individual as to resources available in the state to aid in the development of a feasible, financially viable, initial business plan. An individual must have obtained any occupational certification or license necessary to carry out the individual’s initial business plan prior to applying for the program. An individual must also file a weekly claim for the self-employment assistance allowance and provide a log of self-employment activities as well as any other information required by the director of the department of workforce development.
   The bill provides that the requirements to receive regular unemployment benefits relating to availability for work, active search for work, refusal to accept work, and self-employment income do not apply to an individual otherwise eligible to receive a self-employment assistance allowance. The bill provides that an individual who fails to actively engage in self-employment assistance activities full-time is ineligible to receive the self-employment assistance allowance for each week such a failure occurs.
   The bill provides that the maximum number of individuals eligible for the program at any one time is equal to 5 percent of the individuals receiving regular unemployment benefits.
   The bill directs the director of the department of workforce development to administer the bill in consultation with a small business development center associated with Iowa state university, business accelerators, business incubators, and the John Pappajohn entrepreneurial centers. The bill also directs the director to comply with the rules and policies of the United States department of labor, where practicable, when adopting rules to implement the bill.
   The bill is void if federal authorization for the program ends.