Iowa Administrative Code › Agency 261 - Economic Development Authority › Part V - Innovation and Commercialization Activities › Chapter 116 - Tax Credits for Investments in Certified Innovation Funds › Rule 261-116.3 - Certification of Innovation Funds

Current through Register Vol. 47, No. 3, July 24, 2024
(1) An innovation
				fund shall provide to the authority information as a prerequisite to the
				issuance of any investment tax credits to investors in such innovation funds.
				The innovation fund must provide this information within 120 days from the
				first date on which the equity investments qualifying for the investment tax
				credit have been made (or, for investments made during the 2011 calendar year,
				by the later of 120 days from the first date on which the investments have been
				made or March 31, 2012).
(2)
				Application forms setting forth the information required to certify the
				eligibility of an innovation fund may be obtained by contacting the Economic
				Development Authority, 200 East Grand Avenue, Des Moines, Iowa 50309. The
				telephone number is (515)725-3000. Applications shall be submitted to the
				authority at the address identified above.
(3) The authority will not issue a tax credit
				certificate until the board has certified that a fund meets all of the
				following criteria:
a. The innovation fund has
				submitted a copy of the innovation fund's certificate of limited partnership,
				limited partnership agreement, articles of organization or operating agreement
				certified by the chief executive officer of the innovation fund.
b. The innovation fund has submitted a signed
				statement, from an officer, director, manager, member or general partner of the
				fund, stating the following:
(1) That the
				innovation fund will make investments in promising early-stage companies which
				have a principal place of business in the state. For purposes of rule
				261-116.3(15E), "having a principal place of business in the state" means (1)
				that the business has at least 50 percent of all of its employees in the state,
				(2) that the business pays at least 50 percent of the business's total payroll
				to employees residing in the state, or (3) that the headquarters of the
				business (defined as the home office for a substantial amount of executive
				employees) is in the state.
(2)
				That the innovation fund proposes to make investments in innovative businesses
				which have a principal place of business in the state.
(3) That the innovation fund seeks to secure
				private funding sources for investment in such businesses.
(4) That the innovation fund proposes to
				provide multiple rounds of funding and early-stage private sector funding to
				innovative businesses with a high growth potential, and proposes to focus such
				funding on innovative businesses that show a potential to produce commercially
				viable products or services within a reasonable period of time. In order to
				establish that this criterion is met, the innovation fund shall provide a
				detailed description of the framework the innovation fund will use to evaluate
				a business's growth potential and its ability to produce commercially viable
				products or services within a reasonable period of time. The description shall
				list and discuss the criteria and the attendant process that the innovation
				fund will use to evaluate businesses. The authority will consider requests
				submitted under Iowa Code section
				15.118 or
				22.7 to treat the evaluation
				framework as confidential.
(5) That
				the innovation fund proposes to evaluate all prospective innovative businesses
				using a rigorous approach and proposes to collaborate and coordinate with the
				authority and other state and local entities in an effort to achieve policy
				consistency. In order to establish that this criterion is met, an innovation
				fund shall provide a detailed description of the methods by which each business
				will be evaluated. An innovation fund shall also submit a plan describing the
				actions it will take in order to collaborate and coordinate with other state
				and local entities and the ways in which the innovation fund intends to ensure
				consistency with the policy goals of this chapter. Such a plan shall propose to
				create relationships that can be substantiated in writing, which may include,
				without limitation, contracts, memoranda of understanding, letters of support,
				affidavits, or joint press releases from or with the entities that will be
				involved in the collaborative and coordinating efforts or through a list and
				summary description of the dates and locations for meetings held between the
				innovation fund and the other entities which allowed for collaboration and
				coordination between the innovation fund and those entities in an effort to
				achieve policy consistency.
(6)
				That the innovation fund proposes to collaborate with the regents institutions
				of this state and to leverage relationships with such institutions in order to
				potentially commercialize research developed at those institutions. In order to
				establish that this criterion is met, an innovation fund shall provide written
				confirmation of such relationships which may include, without limitation,
				contracts, memoranda of understanding, letters of support, affidavits, or joint
				press releases from or with the regents institutions of this state or a list
				and summary description of the dates and locations for meetings held between
				the innovation fund and the regents institutions, the names of representatives
				of regents institutions with whom the innovation fund has met, and a brief
				summary of the discussions at those meetings.
(7) That the innovation fund proposes to
				obtain at least $15 million in binding investment commitments and to invest a
				minimum of $15 million in companies that have a principal place of business in
				the state. In order to establish that this criterion is met, an innovation fund
				shall include provisions in the fund's governing documents that provide for the
				continued operations of the fund only if this minimum level of investment
				commitment is reached.