ARC 6833C

ARC 6833C

ECONOMIC DEVELOPMENT AUTHORITY[261]

Notice of Intended Action

Proposing rule making related to state small business credit initiative and providing an opportunity for public comment

The Economic Development Authority hereby proposes to adopt new Chapter 112, "State Small Business Credit Initiative (SSBCI)," Iowa Administrative Code.

Legal Authority for Rule Making

This rule making is proposed under the authority provided in Iowa Code section 15.106A.

State or Federal Law Implemented

This rule making implements, in whole or in part, Iowa Code section 15.108.

Purpose and Summary

On October 11, 2022, the United States Department of the Treasury (Treasury) allocated $96 million to the State of Iowa from the State Small Business Credit Initiative (SSBCI). The Authority will administer the funds through the following four programs approved by the Treasury:

●A loan participation program for Manufacturing 4.0 investments.

●A small business collateral support program.

●A venture capital innovation fund program.

●A venture capital co-investment fund program.

The proposed new Chapter 112 outlines eligible uses of the funds and distinguishes the 2022 allocation from funds previously allocated to the State through the SSBCI in 2011. The 2011 allocation is addressed in 261—Chapter 117.

Fiscal Impact

This rule making has no fiscal impact to the State of Iowa beyond the federal funding allocated to the State by the Treasury.

Jobs Impact

After analysis and review of this rule making, no impact on jobs has been found.

Waivers

Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Authority for a waiver of the discretionary provisions, if any, pursuant to 261—Chapter 199.

Public Comment

Any interested person may submit written or oral comments concerning this proposed rule making. Written or oral comments in response to this rule making must be received by the Authority no later than 4:30 p.m.on February 14, 2023. Comments should be directed to:

Public Hearing

No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)"b," an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee's meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

The following rule-making action is proposed:

Adopt the following new 261—Chapter 112:

CHAPTER 112

STATE SMALL BUSINESS CREDIT INITIATIVE (SSBCI)

261—112.1(15) Purpose. The purpose of this chapter is to establish the eligible uses of the funds allocated to the state of Iowa on October 11, 2022, from the State Small Business Credit Initiative established by the United States Department of the Treasury. The funds are administered by the authority.

261—112.2(15) Definitions. For purposes of this chapter, unless the context otherwise requires:

"Allocation" means the funds allocated to the state of Iowa on October 11, 2022, from the SSBCI by the Treasury. "Allocation" does not include any funds allocated to the state of Iowa from the SSBCI prior to October 11, 2022.

"Authority" means the economic development authority created in Iowa Code section 15.105.

"SSBCI" means the State Small Business Credit Initiative established by the Treasury.

"Treasury" means the United States Department of the Treasury.

261—112.3(15) Federal requirements. The allocation will be administered in accordance with all applicable federal laws, regulations, and guidance, including but not limited to any reporting requirements. The allocation will also be administered in accordance with any agreements between the state and Treasury relating to the SSBCI.

261—112.4(15) Eligible uses. Eligible uses of the allocation include the following:

1.A loan participation program for manufacturing 4.0 investments.

2.A small business collateral support program.

3.A venture capital innovation fund program.

4.A venture capital co-investment fund program.

5.Any other purposes approved by the Treasury.

261—112.5(15) Delegation of certain administrative functions. The authority may delegate certain administrative functions of the program to service providers who have entered into an agreement with the authority to provide such services. Functions that may be delegated pursuant to this rule include but are not limited to initial application review, tracking and monitoring of the applicant's progress, tracking and monitoring of contract terms and conditions, and provision of technical assistance to applicants. The authority will retain, and not delegate, any other function not delegated to a service provider pursuant to any agreement entered into between the authority and a service provider.

These rules are intended to implement Iowa Code section 15.108(9)"b."