Iowa Programs for a Service-Disabled Veteran-Owned Business

Two separate Iowa programmes reach veteran-owned businesses and they use different definitions of veteran, one of them the widest in Iowa law. Targeted small business certification. Section 15.102, subsection 12 defines a "targeted small business" as "a small business which is fifty-one percent or more owned, operated, and actively managed by one or more women, minority persons, service-disabled veterans, or persons with a disability", which is located in Iowa, is operated for profit, and "Has an annual gross income of less than four million dollars computed as an average of the three preceding fiscal years." Three ownership words, not one: owned, operated, and actively managed. A passive 51 percent stake does not qualify. "Service-disabled veteran" is defined by cross-reference: section 15.102, subsection 12, paragraph "b", subparagraph (4), "means the same as defined in 15 U.S.C. §632", which is the Small Business Act. That federal definition turns on a disability that is service-connected as defined in 38 U.S.C. section 101(16). It is a service-connection test, not a percentage test, so a nought percent service-connected rating satisfies it. There is no Iowa residency requirement on the veteran, though the business must be in Iowa. Certification, and no self-certification. Section 15.108, subsection 7, paragraph "d" requires the economic development authority to adopt rules for certifying eligibility and provides that "The rules for certifying eligibility adopted pursuant to this paragraph shall not recognize self-certification by a business." The authority must maintain "a current directory of targeted small businesses certified pursuant to this paragraph" and feed the department of administrative services what it needs to identify them for procurement. You have to go and get certified; asserting it on a bid does not do it. The authority must also help you reach contracts. Paragraph "f" requires the authority to "Encourage and assist small businesses, including small businesses owned and operated by disabled veterans, to obtain state contracts and subcontracts" by cooperating with the purchasing directors of the department of administrative services, the state board of regents and the department of transportation, including developing a uniform small business vendor application form and maintaining a comprehensive source list. The procurement goals, and an arithmetic oddity worth knowing about. Section 73.16 is the Iowa Targeted Small Business Procurement Act. Subsection 1 requires every state agency, department, commission, board, committee, officer or other governing body to purchase goods and services supplied by small and targeted small businesses in Iowa and to ensure "a proportionate share" of them "are given the opportunity to bid on all solicitations". Subsection 2, paragraph "a" requires each purchasing agency, before each fiscal year and in cooperation with the authority's targeted small business project manager, to set a procurement goal from certified targeted small businesses, covering all goods and services including construction but not utility services. The goal is stated "in terms of a dollar amount of certified purchases" and "shall be established at a level that exceeds the procurement levels from certified targeted small businesses during the previous fiscal year." So for state agencies there is no percentage, only a ratchet upward from last year's dollars. Schools, community colleges and area education agencies do have a percentage. Subsection 2, paragraph "c", subparagraph (3): a community college, area education agency or school district "shall establish a procurement goal from certified targeted small businesses ... of at least ten percent of the value of anticipated procurements of goods and services including construction, but not including utility services, each fiscal year." Then paragraph "d": "Of the total value of anticipated procurements of goods and services under this subsection, an additional goal shall be established to procure at least forty percent from minority-owned businesses and forty percent from female-owned businesses and forty percent from service-disabled veteran-owned businesses, as defined in section 73.14, that are targeted small businesses." Three forty percent goals against the same base add to a hundred and twenty percent. They cannot all be met unless businesses fall into more than one category. This catalog records the arithmetic rather than resolving it, because the practical consequence for a veteran-owned business is useful: the statute sets a goal of forty percent of an entity's targeted small business procurement going to service-disabled veteran-owned firms, which is a large number to quote in a conversation with a purchasing office. Section 73.14, subsection 2, paragraph "c" defines "service-disabled veteran-owned business" for the bond professional provisions as "a business that is fifty-one percent or more owned, operated, and actively managed by one or more service-disabled veterans, as defined in 15 U.S.C. §632", and paragraph "d" of section 73.16 cross-references it. Accountability. Section 73.16, subsection 2, paragraph "b" requires each agency director to report quarterly, within fifteen business days of the quarter's end, the total dollar amount of certified purchases from certified targeted small businesses. Paragraph "c", subparagraph (2) requires bid notices to go to the authority's targeted small business internet site "forty-eight hours prior to the issuance of all bid notices", with a description, a point of contact and any subcontract goals. That forty-eight hour lead is a real advantage to a certified business watching that site. Section 8A.111, subsection 6 requires an annual report on the Act. The lending programme, with the widest definition of veteran in Iowa law. Section 12.34, subsection 1, paragraph "a" lets the treasurer of state invest up to the lesser of $108,000,000 or twenty-five percent of the state pooled money fund in certificates of deposit in eligible lending institutions, and: "One-half of the moneys invested pursuant to this section shall be made available under the program implemented pursuant to section 12.43 to increase the availability of lower cost moneys for purposes of injecting needed capital into small businesses which are fifty-one percent or more owned, operated, and actively managed by one or more women, veterans, minority persons, or persons with disabilities." Half of the linked investment pool is reserved for those four categories. The mechanism is a below-market certificate of deposit placed with a bank, which passes the lower cost through to the borrower's loan rate; sections 12.35 through 12.37 set out the application and placement machinery, the certificate may be renewed annually for a total term up to five years, and section 12.36 requires the certificate to earn at least one percent interest. And the definition, in subsection 1, paragraph "b", subparagraph (3): "'Veteran' means a person who served on federal active duty, other than training, in the armed forces of the United States and who was released or discharged under any circumstances other than dishonorable conditions, or who meets the definition of 'veteran' in section 35.1." "Any circumstances other than dishonorable conditions" reaches a general discharge, an other-than-honorable discharge and an uncharacterized discharge. No other Iowa provision in this catalog goes that far. A veteran with bad paper who is shut out of the property tax exemption, the licence plate and the driver's licence designation is inside this programme. Note that this route requires federal active duty other than training, so it is not open to a guard or reserve member who was never activated, and that no disability is required here at all, unlike the targeted small business route. Where to start. The Iowa Economic Development Authority runs targeted small business certification and the directory. The treasurer of state runs the linked investment programme through participating lenders. Home Base Iowa, the state's veteran employment and relocation programme, is not statutory but is the state's front door for connecting veterans to Iowa employers and communities.