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Gov. Tom Vilsack signed a bill Monday that continues a tax credit program that encourages investment in small business. He also discussed legislative changes that breathe new life into the stalled Iowa Fund of Funds.

Also announced was a central Iowa business accelerator that will help beginning companies with issues such as marketing and manufacturing.

The initiatives will "create an even better climate for venture capital and small business development in the state," said Vilsack, who last week re-established the Grow Iowa Values Fund, a $50 million annual economic development initiative that had been struck down in court last summer.

Iowa has struggled to snag investment for entrepreneurs, which can be engines for creating jobs and wealth. The state has one of the lowest levels of venture capital investment in the nation and lags in new business starts, according to a study done this spring for the Federal Home Loan Bank of Des Moines.

Vilsack said investors in young businesses or seed funds can receive a tax credit for 20 percent of their investment. The legislative changes will enable investors to tap about $8.2 million in tax credits. Investors have already received $1.8 million from the $10 million program, which was set to end July 1.

The law also allows more companies to qualify so their investors can receive the credits.

Changes to state law earlier this year will enable the Iowa Fund of Funds to tap $60 million for investment, said Dennis Murdock, president of the Iowa Capital Investment Corp., the private group that oversees the Fund of Funds.

The three-year-old fund will borrow money to make the investments and repay the loans with returns from the investments. The group will invest in venture capital funds, which, in turn, will invest in companies.

The venture capital funds will not be required to invest in Iowa companies, Murdock said, but they are asked to have a presence in Iowa and to consider Iowa companies looking for investment.

The loans are backed with $100 million in state tax credits, but Murdock said he doesn't anticipate ever needing to tap the credits. Murdock said he expected the fund to grow to $130 million over a decade or so.

Vilsack said the group will announce a $5 million investment in a bioscience capital venture fund within a month.

Young companies in central Iowa will be able to tap a new business accelerator for support, thanks to a $175,000 state grant, said Michael Blouin, director of the Iowa Department of Economic Development.

The accelerator - the eighth to get a state grant - is a collaboration of the Greater Des Moines Partnership, Des Moines Area Community College, the Ames Economic Development Commission and the Iowa State University Research Park.

Martha Willits, the Partnership's chief executive, said the accelerator will enable the groups to "link resources" to help businesses flourish. The groups will match the three-year state grant with $175,000.