Bill Text: IA SSB3121 | 2013-2014 | 85th General Assembly | Introduced

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Bill Title: A study bill for an act relating to the administration of certain economic development programs by the economic development authority and including effective date and retroactive applicability provisions.

Spectrum: Unknown

Status: (N/A - Dead) 2014-01-28 - In Economic Growth [SSB3121 Detail]

Download: Iowa-2013-SSB3121-Introduced.html

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Senate Study Bill 3121 - Introduced
SENATE/HOUSE FILE _____
BY (PROPOSED ECONOMIC
DEVELOPMENT AUTHORITY BILL)
A BILL FOR
An Act relating to the administration of certain economic
development programs by the economic development authority
and including effective date and retroactive applicability
provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
INVESTMENT TAX CREDITS
Section 1. Section 15E.43, subsection 1, paragraph b, Code
2014, is amended to read as follows:
b. A tax credit shall be allowed only for an investment made
in the form of cash to purchase equity in a qualifying business
or in a community-based seed capital fund. A taxpayer that has
received a tax credit for an investment in a community-based
seed capital fund shall not claim the tax credit prior to the
third tax year following the tax year in which the investment
is made. Any tax credit in excess of the taxpayer’s liability
for the tax year may be credited to the tax liability for the
following five years or until depleted, whichever is earlier.
A tax credit shall not be carried back to a tax year prior to
the tax year in which the taxpayer redeems the tax credit.
Sec. 2. Section 15E.44, subsection 1, Code 2014, is amended
to read as follows:
1. In order for an equity investment to qualify for a
tax credit, the business in which the equity investment is
made shall, within one hundred twenty days of the date of
the first investment, notify the authority of the names,
addresses, shares issued, consideration paid for the shares,
and the amount of any tax credits, of all shareholders who
may initially qualify for the tax credits , and the earliest
year in which the tax credits may be redeemed . The list
of shareholders who may qualify for the tax credits shall
be amended as new equity investments are sold or as any
information on the list shall change.
Sec. 3. Section 15E.44, subsection 2, paragraph f, Code
2014, is amended to read as follows:
f. The business shall have secured , within twenty-four
months following the first date on which the equity investments
qualifying for tax credits have been made, total equity
or financing, near equity financing , binding investment
commitments, or some combination thereof, equal to at least two
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hundred fifty thousand dollars.
Sec. 4. Section 15E.45, subsection 3, paragraph a,
subparagraph (3), Code 2014, is amended by striking the
subparagraph and inserting in lieu thereof the following:
(3) Any other information required by the authority.
Sec. 5. Section 15E.45, subsection 6, Code 2014, is amended
to read as follows:
6. In the event that a community-based seed capital
fund fails to meet or maintain any requirement set forth in
this section , or in the event that at least thirty-three
percent of the invested capital of the community-based seed
capital fund has not been invested in one or more separate
qualifying businesses, measured at the end of the forty-eighth
thirty-sixth month after commencing the fund’s investing
activities, the authority shall rescind any tax credit
certificates issued to limited partners or members and shall
notify the department of revenue that it has done so, and the
tax credit certificates shall be null and void. However, a A
community-based seed capital fund may apply to the authority
for a one-year waiver of the requirements of this subsection .
Sec. 6. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2014, for tax years
beginning and investments made on or after that date.
DIVISION II
TARGETED SMALL BUSINESS ASSISTANCE
Sec. 7. 2013 Iowa Acts, chapter 13, section 10, subsections
1 and 2, are amended to read as follows:
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
providing assistance to targeted small businesses pursuant to
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subsection subsections 3 and 4 of this section of this Act.
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”, to be used
for the purposes of providing assistance to targeted small
businesses pursuant to subsection subsections 3 and 4 of this
section of this Act.
Sec. 8. 2013 Iowa Acts, chapter 13, section 10, subsection
3, paragraph c, is amended to read as follows:
c. The authority shall, upon completion of the initial
performance period and the other applicable terms of the
agreement with the microloan service provider, submit a report
to the general assembly and the governor’s office describing
the results achieved by the service provider and shall make
recommendations as to whether the state should continue to
provide 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. The report shall also include the results achieved
by the program established to assist entities in developing a
statewide initiative designed to increase the number of female
entrepreneurs in the state pursuant to subsection 4.
Sec. 9. 2013 Iowa Acts, chapter 13, section 10, is amended
by adding the following new subsection:
NEW SUBSECTION . 4. a. From the moneys transferred pursuant
to subsections 1 and 2, the authority may use amounts not
allocated for purposes of subsection 3 for purposes of this
subsection.
b. The authority may establish a program to assist one
or more private sector entities in implementing a multiyear
statewide initiative designed to increase the number of female
entrepreneurs in the state. Such an initiative shall target
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at least ten communities around the state, both urban and
rural, for training and discussion on the personal, legal,
and financial aspects of starting and operating a small
business. The initiative shall also provide for individual
mentoring, access to matched savings accounts intended to be
used for the start or expansion of a small business by a female
entrepreneur, and specialized topical workshops useful to
female entrepreneurs.
c. A targeted small business owned, operated, and actively
managed by one or more women that is receiving assistance under
subsection 3 is also eligible to receive assistance under this
subsection.
d. The program established pursuant to this subsection shall
be implemented, to the extent practicable, in a manner that
complements the program established pursuant to subsection 3.
Results achieved by the program established pursuant to this
subsection shall be included in the report prepared pursuant to
subsection 3.
Sec. 10. EFFECTIVE UPON ENACTMENT. This Act, being deemed
of immediate importance, takes effect upon enactment.
DIVISION III
STRATEGIC INFRASTRUCTURE PROGRAM
Sec. 11. Section 15.311, Code 2014, is amended to read as
follows:
15.311 Title.
This part shall be known as the “Iowa Strategic Investment
Fund” Infrastructure” program.
Sec. 12. Section 15.313, subsection 1, Code 2014, is amended
to read as follows:
1. a. An Iowa strategic investment fund is created The
authority shall establish a fund pursuant to section 15.106A,
subsection 1, paragraph “o” , for purposes of financing
strategic infrastructure projects as described in this
section. A fund established for purposes of this section may
be administered as a revolving fund consisting and may consist
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of any money moneys appropriated by the general assembly for
that purpose purposes of this section and any other moneys
that are lawfully available to and obtained or accepted by
the authority , from the federal government or private sources
for placement in the fund including moneys transferred or
deposited from other funds created pursuant to section 15.106A,
subsection 1, paragraph “o” .
b. Notwithstanding section 8.33 , moneys in the strategic
investment a fund established for purposes of this section
at the end of each fiscal year shall not revert to any other
fund but shall remain in the strategic investment fund for
expenditure for subsequent fiscal years.
c. Moneys in a fund established for purposes of this section
may be transferred to other funds created pursuant to section
15.106A, subsection 1, paragraph “o” .
Sec. 13. Section 15.313, subsection 2, unnumbered paragraph
1, Code 2014, is amended to read as follows:
The assets of the fund program shall be used by the authority
to assist in provide financial assistance for strategic
infrastructure projects that are intended to lead to relocation
or expansion projects for existing businesses as well as
entrepreneurial start-up and expansion projects financial
assistance for new businesses . Moneys in the fund shall
be used for projects designed to meet any of the following
purposes:
Sec. 14. Section 15.313, subsection 2, paragraphs a, b, c,
d, e, and f, Code 2014, are amended by striking the paragraphs.
Sec. 15. Section 15.313, subsection 3, Code 2014, is amended
by striking the subsection and inserting in lieu thereof the
following:
3. For purposes of this section, unless the context
otherwise requires:
a. “Financial assistance” means the same as defined in
section 15.102.
b. “Strategic infrastructure” means projects that develop
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commonly utilized assets that provide an advantage to one
or more private sector entities or that create necessary
physical infrastructure in the state, and such projects are
not adequately provided by the public or private sectors.
Such projects may include vertical improvement developments,
facilities and equipment upgrades, or the redevelopment or
repurposing of underutilized property or other assets, provided
that each project is intended to attract additional public or
private sector investment and result in broad-based prosperity
in this state.
c. “Vertical improvement” means the same as defined in
section 15J.2.
Sec. 16. Section 15.313, Code 2014, is amended by adding the
following new subsection:
NEW SUBSECTION . 4. The authority shall adopt rules to
implement and administer this section. In adopting such rules,
the authority shall narrowly construe the provisions of this
section.
Sec. 17. Section 15.335B, subsection 2, paragraph a, Code
2014, is amended by adding the following new subparagraph:
NEW SUBPARAGRAPH . (7) For deposit in a fund created for
purposes of the strategic infrastructure program established
pursuant to section 15.313.
Sec. 18. Section 384.4, subsection 1, paragraph b, Code
2014, is amended by striking the paragraph.
Sec. 19. 2011 Iowa Acts, chapter 133, section 13A, as
enacted by 2013 Iowa Acts, chapter 142, section 7, is amended
to read as follows:
SEC. 13A. TRANSITION UPON REPEAL.
1. Any moneys in the economic development fund created
pursuant to section 15G.111, Code Supplement 2011 , that
remain unobligated on July 1, 2013, shall be transferred to
the rebuild Iowa infrastructure fund. The authority shall
provide notification to the department of management and to the
legislative services agency at the time of the transfer.
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2. Loan payments or repayments and recaptures of principal,
interest, or other moneys accruing to the authority on or after
July 1, 2013, pursuant to an agreement under chapter 15G,
subchapter I, shall be transferred by the authority to a fund
established by the authority in the state treasury pursuant to
section 15.106A, subsection 1, paragraph “o”.
3. The authority may use any moneys accruing pursuant to
subsection 2 for purposes of section 15.313.
Sec. 20. REPEAL. Section 15E.120, Code 2014, is repealed.
Sec. 21. RETROACTIVE APPLICABILITY. The section of this
Act amending 2011 Iowa Acts, chapter 133, section 13A, as
enacted by 2013 Iowa Acts, chapter 142, section 7, applies
retroactively to July 1, 2013.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill relates to economic development programs by
modifying the administration of investment tax credits for
investments in community-based seed capital funds or qualifying
businesses, targeted small business assistance, and the
strategic investment fund and properly related matters.
Division I of the bill eliminates the prohibition on a
taxpayer claiming the investment tax credit for an equity
investment in a qualifying business earlier than the third
tax year following the tax year in which the investment was
made. The bill eliminates the 24-month requirement for a
qualifying business under the investment tax credits program
to secure total equity or near equity financing and adds
that a qualifying business may also use binding investment
commitments, or a combination of the equity and investment
commitments to demonstrate that it has met the requirement
in current Code to secure at least $250,000. The bill also
changes the date by which a community-based seed capital fund
must invest in a separate qualifying business from 48 months
after commencing the fund’s investing activities to 36 months
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after commencing the fund’s investing activities.
Division I applies retroactively to January 1, 2014, for tax
years beginning on or after that date and investments made on
or after that date.
Division II of the bill allows moneys transferred from the
targeted small business financial assistance program, which
was repealed in the 2013 legislative session, that are not
allocated for the procurement of a microloan service provider
to assist targeted small businesses to be used to establish a
program to assist one or more private entities in implementing
an initiative to increase the number of female entrepreneurs in
the state. A program created for this purpose must complement
the current microloan service provider program which provides
financial and technical assistance to targeted small businesses
at a discounted rate. A targeted small business that is owned,
operated, and managed by a woman and that is receiving the
services of a microloan service provider may also receive
assistance from the statewide initiative.
Division II takes effect upon enactment.
Division III of the bill makes changes to the strategic
investment fund program. The bill changes the name of the
program from the Iowa strategic investment fund program to the
Iowa strategic infrastructure program, and allows the authority
to establish a fund under its general authority for the purpose
of financing strategic infrastructure projects.
Under current law, a strategic investment fund is created
and the fund’s assets are required to be used for relocation or
expansion projects for existing businesses and entrepreneurial
start-up and expansion projects that meet purposes specified in
statute. The bill eliminates these provisions and requires the
fund created by the authority to be used to provide financial
assistance for relocation or expansion projects for existing
businesses as well as financial assistance for new businesses.
The bill also allows the moneys in the fund to be transferred
to other funds created by the authority, and allows the fund
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to receive transfers from other funds, generally, and from
a fund created under the high quality jobs program in Code
section 15.335B, specifically. The bill provides definitions
for “financial assistance”, “strategic infrastructure”, and
“vertical improvement”.
The bill repeals a provision relating to loan repayments
under the former Iowa community development loan program that
included a reference to the strategic investment fund.
The bill requires the authority to transfer loan payments
or repayments and recaptures of principal, interest, or other
moneys accruing to the authority as a result of an agreement
made pursuant to Code chapter 15G, subchapter I, the grow
Iowa financial assistance program, to a fund created by the
authority. This provision of the bill applies retroactively to
July 1, 2013. The bill allows the authority to use any moneys
transferred pursuant to this provision of the bill for purposes
of the strategic infrastructure program.
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