State Rep. Janet Petersen said last week that she will try to make a bill pertaining to small business succession part of Grow Iowa Values Fund legislation.

“I think this is an important part of economic development that has been overlooked for years,” said the Des Moines Democrat. “I see it as a natural fit with the Values Fund.”

The bill would appropriate $100,000 to train Iowa Small Business Development Center staff members in business succession topics, set up a Web site that would serve as a resource for business owners and a place to list businesses for sale, and conduct courses on business succession on the Internet and in some Iowa communities.

Petersen said she introduced the measure after conversations with Jim O’Halloran, who is planning to hand off his truck dealership, O’Halloran International Inc., to his son and employees. She also sought the opinions of several Central Iowa business people and referred to the results of a survey conducted by the Small Business Development Centers, which are sponsored by Iowa State University’s College of Business.

That survey found great concern about business succession issues in Iowa. Statistics show that 28 percent of Iowa’s business owners are age 55 or older and 10 percent are 65 or older.

“We spend a lot of economic development resources on new businesses, but what are we doing for existing businesses?” Petersen said.

The bill, HF 369, was approved by the House Ways and Means Committee April 6 and sent to the Appropriations Committee, which includes Petersen among its members. “Because it has tax and budget implications, the bill has life for the entire length of the session,” Petersen said.

Jon Ryan, state director of the SBDC, said he knows of no similar program among the 63 members of the Association of Small Business Development Centers. “There is an absolute need for it,” he said. For many small-business owners contemplating retirement, “there’s nobody to help them,” Ryan said. “They think all they can do is close the doors, because their employees aren’t able to buy it, and they don’t know how to value the business,” he said. “This bill is intended to help us help them.”

The SBDC survey asked the Professional Developers of Iowa about community concerns regarding business succession issues and received 316 responses, Ryan said. When asked whether closing businesses instead of transferring them to new owners is a problem, 62 percent agreed or strongly agreed; in response to the statement that this situation will be an issue in their community within five years, 56 percent agreed or strongly agreed.

“There’s no question that it is an issue all across Iowa, especially in smaller communities and rural areas,” Ryan said. “People call us and say, ‘The pharmacy just closed without telling anybody.’ If the owners searched for a buyer, maybe somebody would come back to town and run the business.”

Ryan said the listing of businesses for sale on a Web site would not be intended to compete with privately owned business brokerages. “We’re not going to do their job for them, but we can help more efficiently with our network than we’re doing now,” he said. “We want to get people started, then transfer them to people who do this for a living.”

The appropriation section of the bill reads, in part: “The moneys appropriated in this section shall be allocated by Iowa State University to small business development centers to develop and administer programs to assist small businesses to plan for the transfer of ownership of a business to an employee stock ownership plan. The moneys appropriated in this section shall not be used to fund new staff positions.”