Industrial Development Miscellaneous Provisions

Department of Business, Enterprise and Innovation

Explanatory Note:
These provisions will enable Enterprise Ireland to further support businesses through investment, loans and RD&I grants, therefore, limiting the negative effects Brexit could have on vulnerable
enterprises. This will assist firms to remain competitive, to innovate in terms of new product and
service development and to grow in existing and enter new markets.

To amend the Industrial Development Act 1995; to amend the Industrial Development Act 1986; to amend the Industrial Development (Enterprise Ireland) Act 1998, and to provide for related matters

Head 2 – To facilitate research grants to the horticulture industry

Explanatory Note:
So as to facilitate grants to the horticulture sector, the insertion of the words “or non-industrial” and “or horticulture” in the relevant section is proposed. The insertion of these words will permit
Enterprise Ireland giving training and R&D grants to companies that are growing produce, i.e. in the horticultural sector. This will be particularly relevant in a no deal Brexit scenario.

Head 3 – To facilitate grants to support research activity overseas where those research needs cannot be met in Ireland

Explanatory Note:
The current wording of paragraph (b) of sub section (2) of section 29 applies to R&D which “is
carried out wholly or mainly in the State and wholly or mainly sponsored by one or more than one industrial undertaking in the State”.
The amendment facilitates provision of grant aid to the critical research needs of large indigenous companies who are leaders in important fields of veterinary and pharmaceutical industries. Brexit may create an additional need for such supports to be made available to these industries.

Head 4 – To permit research grants up to EU limits

Explanatory Note:
The statutory limit of 50% conflicts with the provisions in the General Block Exemption Regulation (GBER) on State Aid which allows for higher levels of support depending on the company size and
the type of research and development.

General Block Exemption Regulation (GBER) on State Aid – maximum aid intensities for R&D projects Small enterprise Medium-sized enterprise Large enterprise Industrial research 70% 60% 50% Increasing the levels of these provided for in the GBER will level the playing field for Irish companies on a par with EU companies.

Head 5 – To permit advance partial payment of a R&D grant to companies regardless of size

Explanatory Note:
The need for advance payments in certain cases was identified by a significant number of Enterprise Ireland clients during consultations by the Agency in 2016. This need can arise for some companies with tight margins who are working on a new product, process or service and who wish to scale and move up the value chain.

The flexibility for Enterprise Ireland to make advance payments in cases where doing so will help the  client company regardless of its size is being put in place under this Head. This could enhance the prospects of companies sustainability. This will be particularly relevant in a no deal Brexit scenario.

Head 6 – Non-Convertible Debt Instruments

Explanatory Note:
It is proposed to amend the Industrial Development (Enterprise Ireland) Act 1998 to provide the
power to Enterprise Ireland to provide loans to their client companies as an instrument of enterprise development support. There is likely to be an increased demand for such supports in a no deal Brexit scenario.

Head 7 – Convertible Loan Notes

Explanatory Note:
Enabling Enterprise Ireland to maintain the value of the State’s investments through follow on sharevinvestment and convertible loan notes
It is proposed to add a new section to the Industrial Development (Enterprise Ireland) Act 1998 to
· create the power for Enterprise Ireland to subscribe for convertible loan notes.
· address a number of issues that need consideration to allow Enterprise Ireland to operate as a
shareholder in the normal course of business after an investment has been made in a company
based on the company’s developmental agenda to sustain and create jobs.

Head 8 – Aggregate limit on investment aid

Explanatory Note:
It is proposed to move the provisions of Section 34, of the Industrial Development Act 1986 in so far as they apply to Enterprise Ireland, to the Industrial Development (Enterprise Ireland) Act 1998, to ensure that Enterprise Ireland must apply for Government approval for aggregate investment amounts in excess of €7.5 million when giving grants, taking shares, issuing convertible loan notes and lending in general.

Head 9 – Commencement

Provide for the commencement of the Part on the lines of the following – This Part shall come into operation on such day or days as the Minister for Business, Enterprise and Innovation may by order or orders appoint either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or provisions.

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