CHAPTER 21. SMALL BUSINESS INCUBATOR PROGRAM
IC 5-28-21
Chapter 21. Small Business Incubator Program
IC 5-28-21-1
"Economically disadvantaged area"
Sec. 1. As used in this chapter, "economically disadvantaged area"has the meaning set forth in IC 6-3.1-9-1.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-2
"Fund"
Sec. 2. As used in this chapter, "fund" refers to the small businessincubator fund established by section 6 of this chapter.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-3
"Incubator"
Sec. 3. As used in this chapter, "incubator" means a facility inwhich space may be leased by a tenant and in which managementprovides access to business development services for use by tenants.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-4
"Sponsor"
Sec. 4. As used in this chapter, "sponsor" means an organizationthat enters into a written agreement with the corporation to:
(1) establish, operate, and administer a small businessincubator; or
(2) provide funding to an organization that operates a smallbusiness incubator.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-5
"Tenant"
Sec. 5. As used in this chapter, "tenant" means a soleproprietorship, partnership, limited liability company, or corporationoperating a business and occupying space in an incubator.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-6
Establishment of fund; purpose; repayments of loans;nonreversion
Sec. 6. (a) The small business incubator fund is established withinthe state treasury. The fund is a revolving fund. The fund shall beused to provide grants, loans, and loan guarantees under this chapter.
(b) The fund consists of appropriations from the general assemblyand loan repayments.
(c) The corporation shall administer the fund. The following maybe paid from money in the fund:
(1) Expenses of administering the fund. (2) Nonrecurring administrative expenses incurred to carry outthe purposes of this chapter.
(d) The treasurer of state shall invest the money in the fund notcurrently needed to meet the obligations of the fund in the samemanner as other public funds may be invested. Interest that accruesfrom these investments shall be deposited in the state general fund.
(e) Repayments of loans from the fund, including interest, shall bedeposited in the fund.
(f) Money in the fund at the end of a state fiscal year does notrevert to the state general fund.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-7
Application for grant, loan, or loan guarantee; requirements
Sec. 7. A political subdivision (as defined in IC 36-1-2-13), anonprofit organization, or a for-profit organization may submit anapplication to the corporation to obtain a grant, loan, or loanguarantee to establish a small business incubator. The applicationmust:
(1) describe the facility that is to be converted to an incubator;
(2) specify the cost of the conversion;
(3) demonstrate the ability of the applicant to directly provideor arrange for the provision of business development services(including financial consulting assistance, management andmarketing assistance, and physical services) for tenants of theincubator;
(4) demonstrate a potential for sustained use of the incubator byeligible tenants through a market study or other means;
(5) demonstrate the ability of the applicant to operate theincubator in accordance with section 19 of this chapter;
(6) state that the applicant will not discriminate against anemployee or applicant for employment on the basis of race,religion, color, national origin, sex, or age; and
(7) include any other information required by the corporation.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-8
Award of grants, loans, and loan guarantees; criteria
Sec. 8. The corporation shall award grants, loans, and loanguarantees based on the following criteria:
(1) The ability of the applicant to comply with section 19 of thischapter.
(2) The economic impact of the incubator on the community.
(3) Conformance with any areawide and local economicdevelopment plans.
(4) The location of the incubator, in order to encouragegeographic distribution of incubators throughout Indiana.
(5) Other criteria established by the corporation.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-9
Use of grants and loans
Sec. 9. Grants and loans awarded or guaranteed under this chaptermay be used only for the following purposes, when necessary for thecreation and operation of an incubator:
(1) The acquisition and leasing of land and existing buildings.
(2) The construction or rehabilitation of buildings or otherfacilities.
(3) The purchase of equipment and furnishings.
(4) The payment of operating expenses of the incubator duringthe first twenty-four (24) months of its operation.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-10
Grant amount limits
Sec. 10. A grant under this chapter may not exceed the lesser of:
(1) fifty percent (50%) of the total eligible project costs; or
(2) two hundred fifty thousand dollars ($250,000).
As added by P.L.4-2005, SEC.34.
IC 5-28-21-11
Grant use limit
Sec. 11. An applicant for a grant may only use the grant in aneconomically disadvantaged area.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-12
Loan or loan guarantee amount limits
Sec. 12. A loan or loan guarantee under this chapter may notexceed the lesser of:
(1) fifty percent (50%) of the total eligible project costs; or
(2) five hundred thousand dollars ($500,000).
As added by P.L.4-2005, SEC.34.
IC 5-28-21-13
Combined grant and loan or loan guarantee amount limits
Sec. 13. An applicant may apply for both a grant and a loan orloan guarantee, but the combined grant and loan or loan guaranteemay not exceed five hundred thousand dollars ($500,000).
As added by P.L.4-2005, SEC.34.
IC 5-28-21-14
Loan security
Sec. 14. (a) A loan under this chapter must be secured by liens oncollateral at the highest level of priority that can accommodate theborrower's ability to raise sufficient debt and equity capital.
(b) A financial institution holding an obligation that is guaranteedunder this chapter must adequately secure the obligation.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-15
Leased facilities; conditions
Sec. 15. A grant, loan, or loan guarantee for an incubator in afacility that is leased may be made only if the applicant intends tobuy the facility. A loan or loan guarantee must be secured by aleasehold mortgage.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-16
Deferral of principal and interest
Sec. 16. The corporation may defer payment of interest andprincipal on a loan under this chapter for not more than two (2)years.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-17
Loan interest rate; determination
Sec. 17. In order to establish a rate of interest for a loan under thischapter, the corporation shall select a nationally recognized index ofmunicipal bond averages and a date not less than one (1) month normore than two (2) months before the granting of the loan. The rate ofinterest on the loan must be one percent (1%) less than the averagepublished on the date closest to the selected date by the selectednationally recognized index, rounded to the next lowest wholepercent. The corporation may determine that the rounding downshould be to a fraction of a percent that is a multiple of eitherone-tenth of one percent (0.1%) or one-fourth of one percent(0.25%).
As added by P.L.4-2005, SEC.34.
IC 5-28-21-18
Loan or loan guarantee time limits
Sec. 18. A loan or loan guarantee under this chapter may notexceed the lesser of:
(1) ten (10) years; or
(2) the useful life of the property for which the loan is grantedor guaranteed, as determined by the United States Departmentof the Treasury.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-19
Duties of sponsors or assistance recipients
Sec. 19. A sponsor or an organization receiving assistance througha sponsor has the following duties in establishing and operating asmall business incubator with assistance under this chapter:
(1) Securing title to the facility or leasing the facility with theintent to secure title.
(2) Managing the physical development of the incubatorfacility, including the provision of common conference ormeeting space. (3) Furnishing and equipping the facility to provide businessservices to the tenants.
(4) Marketing the facility and securing eligible tenants.
(5) Providing or arranging for the provision of financialconsulting, assistance in accessing private financial markets,and marketing and management assistance services for thetenants.
(6) Establishing rental and service fees.
(7) Encouraging the sharing of ideas among tenants and aidingthe tenants in an innovative manner while they are within theincubator.
(8) Establishing policies for the:
(A) acceptance of tenants into the incubator; and
(B) termination of occupancy by tenants.
(9) Encouraging the establishment of small business incubatorsin economically disadvantaged areas. However, if the smallbusiness incubator secures only a loan or loan guarantee underthis chapter, this subdivision does not limit the establishment ofthe small business incubator to economically disadvantagedareas.
(10) Establishing a local advisory committee to assist in theperformance of the duties listed in this section. Advisorycommittee members must represent fields that can contribute tothe sound operation of the incubator, such as accounting,finance, law, education, and small business. Advisorycommittee members may not vote on projects of sponsors ortenants with whom the member is financially affiliated.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-20
Duties of corporation
Sec. 20. The corporation has the following duties under thischapter:
(1) Making grants, loans, and loan guarantees to sponsors forsmall business incubators.
(2) Ensuring that sponsors receiving grants, loans, or loanguarantees meet the conditions of this chapter.
(3) Receiving and evaluating annual reports from sponsors.These reports must include a financial statement for theincubator, evidence that all the tenants in the incubator areeligible under the terms of this chapter, a list of tenants in theincubator, and any other information required by thecorporation.
(4) Establishing policies to implement this chapter. Thesepolicies must include provisions permitting greater flexibilitywith respect to the establishment and operation of incubators inthe areas described in section 19(9) of this chapter, includingmore flexible tenant policies.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-21
Annual report
Sec. 21. Before July 2 each year, the corporation shall provide thelegislative council and the governor with a report that includes thefollowing information:
(1) The number of applications for incubators received by thecorporation.
(2) The number of applications for incubators approved by thecorporation.
(3) The number of incubators created under this chapter.
(4) The number of tenants occupying each incubator.
(5) The occupancy rate of each incubator.
(6) The number of jobs provided by each incubator and thetenants of each incubator.
(7) The number of firms still operating in Indiana after leavingincubators and the number of jobs provided by those firms. Thecorporation shall attempt to identify the reasons firms that wereestablished in an incubator have moved to another state.
The report to the legislative council must be in an electronic formatunder IC 5-14-6.
As added by P.L.4-2005, SEC.34.
IC 5-28-21-22
Advisory committees
Sec. 22. The corporation may establish one (1) or more advisorycommittees to assist the corporation in implementing this chapter.Advisory committee members may not be affiliated financially witha sponsor or tenant and must represent fields that can contribute tothe sound operation of the incubator program (such as accounting,finance, law, education, and small business).
As added by P.L.4-2005, SEC.34.