Print
House File 2578 - IntroducedA Bill ForAn Act 1establishing a small business revolving loan program
2and small business revolving loan fund within the economic
3development authority to award low-interest loans to
4eligible small businesses.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 15.302 Small business revolving
2loan program and fund.
31. As used in this section, unless the context otherwise
4requires:
5a. “Eligible small business” means a business meeting the
6requirements of subsection 5.
7b. “Financial assistance” means a low-interest loan with a
8five-year term.
9c. “Fund” means the small business revolving loan fund.
10d. “Located in” means the place or places at which
11a business’s operations are located and where at least
12ninety-five percent of the business’s employees work, or where
13employees that are paid at least ninety-five percent of the
14business’s payroll work.
15e. “Program” means the small business revolving loan
16program.
172. a. A small business revolving loan fund is created
18in the state treasury under the control of the authority
19and consists of any moneys appropriated to the fund by the
20general assembly and any other moneys available and obtained
21or accepted by the authority for placement in the fund. The
22fund shall be used to provide financial assistance under the
23program. The authority shall use any moneys specifically
24appropriated for purposes of this section only for the purposes
25of this section.
26b. Notwithstanding section 8.57, subsection 5, paragraph
27“c”, there is appropriated from the rebuild Iowa infrastructure
28fund to the authority for deposit in the fund, for the fiscal
29year beginning July 1, 2020, and for each succeeding fiscal
30year, the sum of five million dollars.
31c. Notwithstanding section 12C.7, subsection 2, interest
32or earnings on moneys in the fund shall accrue to the
33authority and shall be used for purposes of this section.
34Notwithstanding section 8.33, moneys in the fund at the end
35of each fiscal year shall not revert to any other fund but
-1-1shall remain in the fund for expenditure for subsequent fiscal
2years. All repayments, payments of interest, or recaptures
3of the financial assistance provided under this section shall
4accrue to the authority and shall be used for purposes of this
5section.
6d. The authority shall not use more than five percent of
7the moneys in the fund at the beginning of the fiscal year for
8purposes of administrative costs, marketing, and other program
9support.
103. The authority shall establish and administer a small
11business revolving loan program for purposes of awarding
12financial assistance to eligible small businesses. Financial
13assistance awarded to an eligible small business pursuant to
14the program shall not exceed fifty thousand dollars.
154. The authority shall begin to award financial assistance
16from the fund not later than January 1, 2021.
175. A business is eligible to apply for financial assistance
18under the program if the business meets all of the following
19criteria at the time of the business’s application:
20a. The business has fifteen or fewer full-time equivalent
21employees.
22b. The business is located in Iowa.
23c. The business is owned, operated, and actively managed by
24a resident of Iowa.
25d. The business has a business plan and has received
26assistance in the development stage or the expansion stage from
27a small business development center.
28e. If the business has been a going concern for two years or
29more, the business has not been found to be in violation of any
30environmental or worker safety laws or rules.
31f. The business only employs individuals legally authorized
32to work in the state.
33g. The business does not engage in the production,
34depiction, or distribution of obscene material. For purposes
35of this paragraph, “obscene material” means the same as defined
-2-1in section 728.1.
2h. The business is not in bankruptcy and is not imminently
3contemplating filing for bankruptcy.
46. Upon approval by the authority of a business’s
5application, the business shall enter into an agreement with
6the authority which shall include but not be limited to all of
7the following provisions:
8a. If the business, after being awarded financial
9assistance, does not continue to meet one or more of the
10criteria for eligibility under subsection 5, except for
11subsection 5, paragraph “a”, all or a portion of the financial
12assistance received is subject to disallowance, recapture, or
13immediate repayment.
14b. If, after being awarded financial assistance, the
15business ceases operations or removes a significant portion
16of its operations to a location outside of the state, all or
17a portion of the financial assistance received is subject to
18disallowance, recapture, or immediate repayment.
197. a. An eligible small business shall not receive more
20than one award of financial assistance under this section.
21b. An eligible small business that is awarded financial
22assistance under this section may apply for financial
23assistance under other programs administered by the authority.
24c. An eligible small business that is awarded financial
25assistance under this section shall not use such financial
26assistance for purposes of meeting the business’s payroll
27obligations.
288. The authority shall, by January 15 of each year, submit
29a report on the program to the general assembly. The report
30shall include all of the following information for each small
31business that is awarded financial assistance under the program
32in the immediately preceding calendar year:
33a. The industry or service area in which the business
34operates.
35b. The number of employees employed by the business.
-3- 1c. The amount of the financial assistance awarded by the
2authority to the business.
3d. The county in which the business is located.
4e. Whether the business is a start-up or a going concern.
5f. Identification of the small business development center
6providing the business with assistance in the development stage
7or the expansion stage.
8g. If applicable, identification of the small business
9center that referred the business to the program.
109. The authority shall adopt rules pursuant to chapter 17A
11as necessary to administer the program.
12EXPLANATION
13The inclusion of this explanation does not constitute agreement with
14the explanation’s substance by the members of the general assembly.
15This bill establishes a small business revolving loan
16program and small business revolving loan fund within the
17economic development authority for the purpose of awarding
18low-interest loans to eligible small businesses.
19The bill creates a small business revolving loan fund
20(fund) in the state treasury under the control of the economic
21development authority (authority). The fund consists of any
22moneys appropriated to the fund by the general assembly and
23any other moneys available and obtained or accepted by the
24authority for placement in the fund. The bill establishes a $5
25million standing appropriation for the fund for the fiscal year
26beginning July 1, 2020, from the rebuild Iowa infrastructure
27fund. The bill requires that the fund be used to provide
28financial assistance under the small business revolving loan
29program (program). “Financial assistance” is defined in the
30bill as a low-interest loan with a five-year term.
31Interest or earnings on moneys in the fund shall accrue to
32the authority and must be used for purposes of the program.
33Moneys in the fund at the end of each fiscal year do not revert
34to any other fund but remain in the fund for expenditure for
35subsequent fiscal years. All payments of interest, repayments,
-4-1or recaptures of financial assistance awarded under the program
2accrue to the authority and must be used for purposes of the
3program. The authority may use not more than 5 percent of the
4moneys in the fund at the beginning of each fiscal year for
5purposes of administrative costs, marketing, and other program
6support. The authority is required to begin to award financial
7assistance from the fund not later than January 1, 2021.
8The bill directs the authority to establish a program for
9purposes of providing financial assistance to eligible small
10businesses. Financial assistance awarded to an eligible small
11business shall not exceed $50,000. A business is eligible
12to apply for financial assistance under the program if the
13business, at the time of application, has 15 or fewer full-time
14equivalent employees; is located in Iowa; is owned, operated,
15and actively managed by a resident of Iowa; has a business plan
16and has received assistance in the development stage or the
17expansion stage from a small business development center; only
18employs individuals legally authorized to work in the state;
19does not engage in the production, depiction, or distribution
20of obscene material; and is not in bankruptcy or imminently
21contemplating filing for bankruptcy. If the business has been
22a going concern for two years or more, the business must not
23have violated any environmental or worker safety laws or rules.
24“Located in” is defined in the bill as the place or places at
25which a business’s operations are located and where at least 95
26percent of the business’s employees work, or where employees
27that are paid at least 95 percent of the business’s payroll
28work.
29Upon the authority’s approval of a business’s application,
30the eligible small business is required to enter into an
31agreement with the authority. The agreement must include
32provisions as outlined in the bill.
33An eligible small business may not be awarded more than one
34loan under the program; however, the business may apply for
35financial assistance under other programs administered by the
-5-1authority. Awarded financial assistance cannot be used by an
2eligible small business for meeting payroll obligations.
3The bill directs the authority to submit an annual report on
4the program by January 15 to the general assembly. The report
5must include information, as detailed in the bill, for each
6business that received financial assistance under the program
7in the immediately preceding calendar year.
8The authority must adopt rules pursuant to Code chapter 17A
9as necessary to administer the program.
-6-ko/jh
2and small business revolving loan fund within the economic
3development authority to award low-interest loans to
4eligible small businesses.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 15.302 Small business revolving
2loan program and fund.
31. As used in this section, unless the context otherwise
4requires:
5a. “Eligible small business” means a business meeting the
6requirements of subsection 5.
7b. “Financial assistance” means a low-interest loan with a
8five-year term.
9c. “Fund” means the small business revolving loan fund.
10d. “Located in” means the place or places at which
11a business’s operations are located and where at least
12ninety-five percent of the business’s employees work, or where
13employees that are paid at least ninety-five percent of the
14business’s payroll work.
15e. “Program” means the small business revolving loan
16program.
172. a. A small business revolving loan fund is created
18in the state treasury under the control of the authority
19and consists of any moneys appropriated to the fund by the
20general assembly and any other moneys available and obtained
21or accepted by the authority for placement in the fund. The
22fund shall be used to provide financial assistance under the
23program. The authority shall use any moneys specifically
24appropriated for purposes of this section only for the purposes
25of this section.
26b. Notwithstanding section 8.57, subsection 5, paragraph
27“c”, there is appropriated from the rebuild Iowa infrastructure
28fund to the authority for deposit in the fund, for the fiscal
29year beginning July 1, 2020, and for each succeeding fiscal
30year, the sum of five million dollars.
31c. Notwithstanding section 12C.7, subsection 2, interest
32or earnings on moneys in the fund shall accrue to the
33authority and shall be used for purposes of this section.
34Notwithstanding section 8.33, moneys in the fund at the end
35of each fiscal year shall not revert to any other fund but
-1-1shall remain in the fund for expenditure for subsequent fiscal
2years. All repayments, payments of interest, or recaptures
3of the financial assistance provided under this section shall
4accrue to the authority and shall be used for purposes of this
5section.
6d. The authority shall not use more than five percent of
7the moneys in the fund at the beginning of the fiscal year for
8purposes of administrative costs, marketing, and other program
9support.
103. The authority shall establish and administer a small
11business revolving loan program for purposes of awarding
12financial assistance to eligible small businesses. Financial
13assistance awarded to an eligible small business pursuant to
14the program shall not exceed fifty thousand dollars.
154. The authority shall begin to award financial assistance
16from the fund not later than January 1, 2021.
175. A business is eligible to apply for financial assistance
18under the program if the business meets all of the following
19criteria at the time of the business’s application:
20a. The business has fifteen or fewer full-time equivalent
21employees.
22b. The business is located in Iowa.
23c. The business is owned, operated, and actively managed by
24a resident of Iowa.
25d. The business has a business plan and has received
26assistance in the development stage or the expansion stage from
27a small business development center.
28e. If the business has been a going concern for two years or
29more, the business has not been found to be in violation of any
30environmental or worker safety laws or rules.
31f. The business only employs individuals legally authorized
32to work in the state.
33g. The business does not engage in the production,
34depiction, or distribution of obscene material. For purposes
35of this paragraph, “obscene material” means the same as defined
-2-1in section 728.1.
2h. The business is not in bankruptcy and is not imminently
3contemplating filing for bankruptcy.
46. Upon approval by the authority of a business’s
5application, the business shall enter into an agreement with
6the authority which shall include but not be limited to all of
7the following provisions:
8a. If the business, after being awarded financial
9assistance, does not continue to meet one or more of the
10criteria for eligibility under subsection 5, except for
11subsection 5, paragraph “a”, all or a portion of the financial
12assistance received is subject to disallowance, recapture, or
13immediate repayment.
14b. If, after being awarded financial assistance, the
15business ceases operations or removes a significant portion
16of its operations to a location outside of the state, all or
17a portion of the financial assistance received is subject to
18disallowance, recapture, or immediate repayment.
197. a. An eligible small business shall not receive more
20than one award of financial assistance under this section.
21b. An eligible small business that is awarded financial
22assistance under this section may apply for financial
23assistance under other programs administered by the authority.
24c. An eligible small business that is awarded financial
25assistance under this section shall not use such financial
26assistance for purposes of meeting the business’s payroll
27obligations.
288. The authority shall, by January 15 of each year, submit
29a report on the program to the general assembly. The report
30shall include all of the following information for each small
31business that is awarded financial assistance under the program
32in the immediately preceding calendar year:
33a. The industry or service area in which the business
34operates.
35b. The number of employees employed by the business.
-3- 1c. The amount of the financial assistance awarded by the
2authority to the business.
3d. The county in which the business is located.
4e. Whether the business is a start-up or a going concern.
5f. Identification of the small business development center
6providing the business with assistance in the development stage
7or the expansion stage.
8g. If applicable, identification of the small business
9center that referred the business to the program.
109. The authority shall adopt rules pursuant to chapter 17A
11as necessary to administer the program.
12EXPLANATION
13The inclusion of this explanation does not constitute agreement with
14the explanation’s substance by the members of the general assembly.
15This bill establishes a small business revolving loan
16program and small business revolving loan fund within the
17economic development authority for the purpose of awarding
18low-interest loans to eligible small businesses.
19The bill creates a small business revolving loan fund
20(fund) in the state treasury under the control of the economic
21development authority (authority). The fund consists of any
22moneys appropriated to the fund by the general assembly and
23any other moneys available and obtained or accepted by the
24authority for placement in the fund. The bill establishes a $5
25million standing appropriation for the fund for the fiscal year
26beginning July 1, 2020, from the rebuild Iowa infrastructure
27fund. The bill requires that the fund be used to provide
28financial assistance under the small business revolving loan
29program (program). “Financial assistance” is defined in the
30bill as a low-interest loan with a five-year term.
31Interest or earnings on moneys in the fund shall accrue to
32the authority and must be used for purposes of the program.
33Moneys in the fund at the end of each fiscal year do not revert
34to any other fund but remain in the fund for expenditure for
35subsequent fiscal years. All payments of interest, repayments,
-4-1or recaptures of financial assistance awarded under the program
2accrue to the authority and must be used for purposes of the
3program. The authority may use not more than 5 percent of the
4moneys in the fund at the beginning of each fiscal year for
5purposes of administrative costs, marketing, and other program
6support. The authority is required to begin to award financial
7assistance from the fund not later than January 1, 2021.
8The bill directs the authority to establish a program for
9purposes of providing financial assistance to eligible small
10businesses. Financial assistance awarded to an eligible small
11business shall not exceed $50,000. A business is eligible
12to apply for financial assistance under the program if the
13business, at the time of application, has 15 or fewer full-time
14equivalent employees; is located in Iowa; is owned, operated,
15and actively managed by a resident of Iowa; has a business plan
16and has received assistance in the development stage or the
17expansion stage from a small business development center; only
18employs individuals legally authorized to work in the state;
19does not engage in the production, depiction, or distribution
20of obscene material; and is not in bankruptcy or imminently
21contemplating filing for bankruptcy. If the business has been
22a going concern for two years or more, the business must not
23have violated any environmental or worker safety laws or rules.
24“Located in” is defined in the bill as the place or places at
25which a business’s operations are located and where at least 95
26percent of the business’s employees work, or where employees
27that are paid at least 95 percent of the business’s payroll
28work.
29Upon the authority’s approval of a business’s application,
30the eligible small business is required to enter into an
31agreement with the authority. The agreement must include
32provisions as outlined in the bill.
33An eligible small business may not be awarded more than one
34loan under the program; however, the business may apply for
35financial assistance under other programs administered by the
-5-1authority. Awarded financial assistance cannot be used by an
2eligible small business for meeting payroll obligations.
3The bill directs the authority to submit an annual report on
4the program by January 15 to the general assembly. The report
5must include information, as detailed in the bill, for each
6business that received financial assistance under the program
7in the immediately preceding calendar year.
8The authority must adopt rules pursuant to Code chapter 17A
9as necessary to administer the program.
-6-ko/jh