S.F. 356 Section 1. Section 8.6, subsection 12, Code 2013, is amended 1 to read as follows: 2 12. Targeted small businesses. To assist the director 3 of the economic development authority as requested in the 4 establishment and implementation of the Iowa targeted small 5 business procurement Act and the targeted small business loan 6 guarantee program . 7 Sec. 2. Section 15.107B, subsection 2, paragraph c, Code 8 2013, is amended by striking the paragraph. 9 Sec. 3. Section 15.108, subsection 7, paragraph c, 10 unnumbered paragraph 1, Code 2013, is amended to read as 11 follows: 12 Aid for the development and implementation of the Iowa 13 targeted small business procurement Act established in sections 14 73.15 through 73.21 and the targeted small business financial 15 assistance program established in section 15.247 . 16 Sec. 4. Section 15.108, subsection 7, paragraph c, 17 subparagraph (1), subparagraph division (c), Code 2013, is 18 amended by striking the subparagraph division. 19 Sec. 5. Section 15.108, subsection 7, paragraph c, 20 subparagraphs (3) and (5), Code 2013, are amended by striking 21 the subparagraphs. 22 Sec. 6. Section 15.240, subsection 2, paragraph f, Code 23 2013, is amended by striking the paragraph. 24 Sec. 7. Section 15.313, subsection 2, paragraph c, Code 25 2013, is amended by striking the paragraph. 26 Sec. 8. Section 73.20, Code 2013, is amended to read as 27 follows: 28 73.20 Determination of ability to perform. 29 Before announcing a contract award pursuant to the targeted 30 small business procurement goal program, the purchasing 31 authority shall evaluate whether the targeted small business 32 scheduled to receive the award is able to perform the contract. 33 This determination shall include consideration of production 34 and financial capacity and technical competence. If the 35 -1- LSB 1272SV (2) 85 ad/sc 1/ 4

S.F. 356 purchasing authority determines that the targeted small 1 business may be unable to perform, the director of the economic 2 development authority shall be notified and shall assist the 3 targeted small business pursuant to section 15.108, subsection 4 7 , paragraph “c” , subparagraph (3) . 5 Sec. 9. REPEAL. Section 15.247, Code 2013, is repealed. 6 Sec. 10. TRANSITION UPON REPEAL. 7 1. Upon repeal of the targeted small business financial 8 assistance program established in section 15.247, the authority 9 shall transfer all unencumbered and unobligated moneys accruing 10 to the authority pursuant to existing agreements to a fund 11 established by the authority in the state treasury under 12 the control of the authority pursuant to section 15.106A, 13 subsection 1, paragraph “o”, to be used for the purposes of 14 providing assistance to targeted small businesses pursuant to 15 subsection 3 of this section of this Act. 16 2. Loan payments or repayments and recaptures of principal, 17 interest, or other moneys accruing to the authority on or after 18 June 30, 2013, pursuant to an agreement under section 15.247, 19 shall be transferred to a fund established by the authority in 20 the state treasury under the control of the authority pursuant 21 to section 15.106A, subsection 1, paragraph “o”, to be used 22 for the purposes of providing assistance to targeted small 23 businesses pursuant to subsection 3 of this section of this 24 Act. 25 3. a. From the moneys transferred pursuant to subsections 1 26 and 2, the authority shall procure the services of a qualified 27 microloan service provider to provide financial and technical 28 assistance to targeted small businesses in Iowa. 29 b. The authority shall enter into an agreement with a 30 microloan service provider for the provision of services to 31 targeted small businesses. The agreement shall provide for 32 an initial performance period of three years. In engaging 33 the services of a qualified microloan service provider, the 34 authority shall require the service provider to offer financial 35 -2- LSB 1272SV (2) 85 ad/sc 2/ 4

S.F. 356 and technical assistance to targeted small businesses at a 1 discounted rate. The authority shall ensure that the moneys 2 transferred for purposes of this subsection are used to 3 subsidize the provision of financial and technical assistance 4 by the microloan service provider to targeted small businesses 5 in order for the microloan service provider to offer its 6 services at a discounted rate. 7 c. The authority shall, upon completion of the initial 8 performance period and the other applicable terms of the 9 agreement with the microloan service provider, submit a report 10 to the general assembly and the governor’s office describing 11 the results achieved by the service provider and shall make 12 recommendations as to whether the state should continue to 13 provide funds for future fiscal years for the purpose of 14 providing financial and technical assistance to targeted 15 small businesses through the services of a microloan service 16 provider. 17 d. For purposes of this subsection, “targeted small 18 business” means the same as defined in section 15.102. 19 EXPLANATION 20 This bill terminates the targeted small business financial 21 assistance program and transfers funds to the economic 22 development authority for the services of a microloan service 23 provider to assist targeted small businesses. 24 The Code defines a targeted small business as a small 25 business that is 51 percent or more owned, operated, and 26 actively managed by a minority person, a person with a 27 disability, or a woman. A targeted small business must also be 28 located in the state, operated for profit, and have an average 29 annual gross income of less than $4 million over the three 30 preceding fiscal years. The targeted small business financial 31 assistance program is a program that provides loan-based 32 financing and grants to eligible targeted small businesses 33 through the strategic investment fund created in Code section 34 15.313. The bill terminates the targeted small business 35 -3- LSB 1272SV (2) 85 ad/sc 3/ 4

S.F. 356 financial assistance program, as well as the program’s board, 1 and the targeted small business advocate service provider which 2 provided mentoring, outreach, and professional development 3 services to certified targeted small businesses. 4 The bill allows the economic development authority, upon 5 repeal of the program, to transfer all unencumbered and 6 unobligated moneys as well as loan payments or repayments 7 and recaptures of principal, interest, or other moneys 8 accruing from an existing agreement entered into under the 9 targeted small business financial assistance program to a fund 10 established by the economic development authority. 11 The bill requires the authority to use the moneys 12 transferred to provide assistance to targeted small businesses 13 through the procurement of the services of a qualified 14 microloan service provider that will provide financial and 15 technical assistance to targeted small businesses in Iowa. 16 The bill provides that the economic development authority 17 shall enter into an agreement with a microloan service provider 18 for the provision of financial and technical services to 19 targeted small businesses. The economic development authority 20 shall require that the microloan service provider offer 21 such assistance to targeted small businesses at a discounted 22 rate, and the transferred moneys shall be used to enable the 23 microloan service provider to offer that discounted rate. The 24 agreement shall provide for a three-year initial performance 25 period. 26 After completion of the initial performance period, the 27 bill requires the economic development authority to submit 28 a report to the governor and the general assembly with the 29 results achieved by the service provider and recommendations 30 as to whether the state should continue to provide funds for 31 future fiscal years for the purpose of providing assistance to 32 targeted small businesses through a microloan service provider. 33 -4- LSB 1272SV (2) 85 ad/sc 4/ 4