H.F. 2509 Section 1. NEW SECTION . 15.248 Targeted small business 1 grant program and fund. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Board” means the targeted small business grant program 5 board. 6 b. “Disability” means, with respect to an individual, a 7 physical or mental impairment that substantially limits one or 8 more major life activities of the individual; a record of a 9 physical or mental impairment that substantially limits one or 10 more major life activities of the individual; or being regarded 11 as an individual with a physical or mental impairment that 12 substantially limits one or more major life activities of the 13 individual. 14 c. “Fund” means the targeted small business grant fund. 15 d. “Located in” means the place or places at which a 16 targeted small business’s operations are located and where at 17 least ninety-five percent of the business’s employees work, or 18 where employees that are paid at least ninety-five percent of 19 the business’s payroll work. 20 e. “Major life activity” includes functions such as caring 21 for oneself, performing manual tasks, seeing, hearing, eating, 22 sleeping, walking, standing, lifting, bending, speaking, 23 breathing, learning, reading, concentrating, thinking, 24 communicating, and working. “Major life activity” also 25 includes the operation of a major bodily function, including 26 but not limited to functions of the immune system; normal 27 cell growth; and digestive, bowel, bladder, neurological, 28 brain, respiratory, circulatory, endocrine, and reproductive 29 functions. 30 f. “Minority individual” means an individual who is Black, 31 Latino, Asian, Pacific Islander, American Indian, or Alaskan 32 Native. 33 g. “Program” means the targeted small business grant 34 program. 35 -1- LSB 5654YH (1) 89 ko/jh 1/ 7

H.F. 2509 h. “Service-disabled veteran” means an individual who 1 served in the active military, naval, or air service, and 2 who was discharged or released under conditions other than 3 dishonorable, and whose disability was incurred or aggravated 4 in the line of duty in the active military, naval, or air 5 service. 6 i. “Single management” means a business that is not a 7 subsidiary of any other business. 8 j. “Small business” means any enterprise located in 9 this state that is operated for profit and is under single 10 management, and that has either fewer than twenty employees 11 or an annual gross income of less than four million dollars 12 computed as the average of the business’s three preceding 13 fiscal years. 14 k. “Targeted small business” means a small business which is 15 fifty-one percent or more owned, operated, and actively managed 16 by one or more women, minority individuals, service-disabled 17 veterans, or individuals with a disability. 18 2. a. A targeted small business grant fund is created 19 in the state treasury under the control of the authority and 20 consists of any moneys appropriated to the fund by the general 21 assembly and any other moneys available to, obtained, or 22 accepted by the authority for placement in the fund. The fund 23 shall be used for purposes of this section. The authority 24 shall use any moneys specifically appropriated for purposes of 25 this section only for the purposes of this section. 26 b. Commencing with the fiscal year beginning July 1, 2022, 27 and for each fiscal year thereafter, there is appropriated from 28 the general fund of the state to the authority four million 29 dollars for deposit in the fund. 30 c. Notwithstanding section 12C.7, subsection 2, interest 31 or earnings on moneys in the fund shall accrue to the 32 authority and shall be used for purposes of this section. 33 Notwithstanding section 8.33, moneys in the fund at the end 34 of each fiscal year shall not revert to any other fund but 35 -2- LSB 5654YH (1) 89 ko/jh 2/ 7

H.F. 2509 shall remain in the fund for expenditure for subsequent fiscal 1 years. All recaptures of grants awarded under this section 2 shall accrue to the authority and shall be used for purposes of 3 this section. 4 d. The authority shall use not more than five percent of 5 the moneys in the fund at the beginning of the fiscal year for 6 purposes of administrative costs, marketing, and other program 7 support. 8 3. The authority shall establish and administer a targeted 9 small business grant program for purposes of awarding grants 10 to targeted small businesses. A grant awarded to a targeted 11 small business under the program shall not exceed seventy-five 12 thousand dollars and a targeted small business shall only 13 receive one grant under the program. 14 4. The authority shall begin to award grants from the fund 15 to eligible targeted small businesses not later than January 16 31, 2023. 17 5. To be eligible for a grant under the program a targeted 18 small business must do all of the following: 19 a. Receive assistance in either the targeted small 20 business’s development or expansion stage from a small business 21 development center. 22 b. Submit an application to the authority pursuant to rules 23 promulgated by the authority. 24 6. a. A targeted small business grant program board shall 25 be established and shall consist of seven members appointed by 26 the director, including one representative of the authority. 27 Each member appointed to the board must have a background in 28 finance, insurance, banking, hospitality, retail, law, or 29 the performing arts and must have at least fifty-one percent 30 ownership of a privately owned, for-profit business. Each of 31 the following populations shall be represented separately by at 32 least one board member: 33 (1) Individuals who are Black. 34 (2) Individuals who are Latino. 35 -3- LSB 5654YH (1) 89 ko/jh 3/ 7

H.F. 2509 (3) Individuals who are Asian or Pacific Islander. 1 (4) Individuals who are American Indians or Alaskan 2 natives. 3 (5) Individuals who are service-disabled veterans. 4 (6) Individuals with a disability. 5 (7) Individuals who are female. 6 b. Each board member shall serve a two-year term and may be 7 reappointed to one additional two-year term. 8 7. a. Each application submitted to the authority shall be 9 reviewed by the board. The board shall approve or deny each 10 application. If an application is approved, the board shall 11 determine the grant amount to be awarded to the applicant. 12 b. The following shall be ineligible for a grant under the 13 program: 14 (1) A member of the board, or an individual within the third 15 degree of consanguinity of a member of the board. 16 (2) An employee of the authority, or an individual within 17 the third degree of consanguinity of an employee of the 18 authority. 19 (3) A targeted small business in which a member of 20 the board, or an individual within the third degree of 21 consanguinity of a member of the board, has any financial 22 interest. 23 (4) A targeted small business in which an employee of 24 the authority, or an individual within the third degree 25 of consanguinity of an employee of the authority, has any 26 financial interest. 27 8. An eligible targeted small business that is awarded a 28 grant under this section may apply for financial assistance 29 under other programs administered by the authority. 30 9. The authority shall, by January 31 of each year, submit 31 a report on the program to the general assembly. The report 32 must include all of the following information for each targeted 33 small business that is awarded a grant under the program in the 34 immediately preceding calendar year: 35 -4- LSB 5654YH (1) 89 ko/jh 4/ 7

H.F. 2509 a. The number of women, minority individuals, 1 service-disabled veterans, or individuals with a disability 2 that actively own, operate, or manage the business. 3 b. The industry or service area in which the business 4 operates. 5 c. The number of employees employed by the business. 6 d. The grant amount awarded to the business. 7 e. The county in which the business is located. 8 f. Whether the business is a start-up or a going concern. 9 g. Identification of the small business development center 10 providing the business with assistance in the development or 11 expansion stage. 12 h. If applicable, identification of the small business 13 development center that referred the business to the program. 14 10. The authority shall adopt rules pursuant to chapter 17A 15 as necessary to administer the program. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill establishes a targeted small business grant fund 20 (fund) and a targeted small business grant program (program) 21 within the economic development authority (authority). 22 “Targeted small business” (targeted business) is defined in the 23 bill as a small business which is 51 percent or more owned, 24 operated, and actively managed by one or more women, minority 25 individuals, service-disabled veterans, or individuals with 26 a disability. “Small business” is defined as an enterprise 27 located in this state that is operated for profit and is under 28 single management, and that has either fewer than 20 employees 29 or an annual gross income of less than $4 million computed 30 as the average of the business’s three preceding fiscal 31 years. “Minority individual”, “service-disabled veterans”, 32 “disability”, and “single management” are also defined in the 33 bill. 34 The fund is created in the state treasury under the control 35 -5- LSB 5654YH (1) 89 ko/jh 5/ 7

H.F. 2509 of the authority and consists of any moneys appropriated 1 to the fund by the general assembly, and any other moneys 2 available to, obtained, or accepted by the authority. The 3 fund must be used to award grants under the program and all 4 moneys specifically appropriated to the fund must be used for 5 purposes of the program. Commencing with the fiscal year 6 beginning July 1, 2022, and for each fiscal year thereafter, 7 there is appropriated from the general fund of the state to 8 the authority $4 million for deposit in the fund. Interest 9 or earnings on moneys in the fund accrue to the authority and 10 moneys in the fund do not revert. All recaptures of awarded 11 grants accrue to the authority and must be used for purposes of 12 the program. The authority cannot use more than 5 percent of 13 the moneys in the fund at the beginning of the fiscal year for 14 administrative costs, marketing, and other program support. 15 The authority must establish and administer the program for 16 purposes of awarding grants to eligible targeted businesses. 17 The authority must begin to award grants to eligible targeted 18 businesses not later than January 31, 2023. A grant awarded 19 to any one eligible targeted business cannot exceed $75,000 20 and a business can only receive one grant under the program. 21 To be eligible for a grant a targeted business must receive 22 assistance in the business’s development or expansion stage 23 from a small business development center. An applicant must 24 also submit an application to the authority pursuant to rules 25 adopted by the authority. 26 The bill establishes a program board that consists of seven 27 members appointed by the director, including one representative 28 of the authority. The bill details the eligibility criteria 29 for members of the board. Each board member serves a two-year 30 term and may be reappointed to one additional two-year term. 31 Each application submitted to the authority must be reviewed 32 by the board and the board must determine whether to approve or 33 deny an application. If an application is approved, the board 34 must determine the grant amount to award to the applicant. 35 -6- LSB 5654YH (1) 89 ko/jh 6/ 7

H.F. 2509 The bill specifies the individuals and businesses that are 1 ineligible for grants under the program. A targeted business 2 that is awarded a grant under the program may apply for 3 financial assistance under other programs administered by the 4 authority. 5 The authority must, by January 31 of each year, submit a 6 report on the program to the general assembly. The report must 7 contain the information specified in the bill. 8 The authority must adopt rules as necessary to administer 9 the program. 10 -7- LSB 5654YH (1) 89 ko/jh 7/ 7