Regional Matters - Law on the Institute of Regional Development Act No 106/1999

The Institute of Regional Development is an independent institution owned by the Icelandic state. The supreme authority of the Institute is held by the Minister of Industry.
The Minister of Industry shall determine the location of the Institute of Regional Development, following the recommendation of the Board of Directors of the Institute.

The purpose of he Institute is to work toward the strengthening of regional and economic development in Iceland outside the greater Reykjavík area.
In accordance with its purpose, the Institute engages in the preparation, organisation, and funding of projects and the granting of loans with the aim of supporting settlement, strengthening local economies, and encouraging industrial innovation. Funding of projects shall be conducted in co-operation with other parties, as appropriate.
The Institute shall monitor regional and economic development in Iceland, by collecting data and conducting research. The Institute shall organise and engage in industrial counselling in co-operation with industrial development associations, municipalities, and other parties. The Institute may prepare plans for the development of local communities and economies in order to strengthen settlements in Iceland and the country's economy as a whole. The Institute may also participate in drafting regional plans in accordance with the Planning and Building Act.

The Annual Meeting of the Institute of Regional Development shall be held before 1 July each year. The conduct of the Annual Meeting shall be described further in a Regulation.
During the Annual Meeting, the Minister of Industry shall appoint seven people as Members of the Institute's Board of Directors for a term of one year at a time, and seven alternate members. The Minister shall appoint a chairman and vice-chairman of the Board, and decide the Board's remuneration.
Decisions at meetings of the Board of Directors shall be taken by majority vote.

The duties of the Board of Directors of the Institute of Regional Development are as follows:
1. To decide on the organisation of the work of the Institute to the extent that this is no determined by Government Regulation.
2. To formulate policy regarding chief points of emphasis, projects and working procedures, and ensure that the policy is implemented.
3. To determine operating and work plans for a period of one year at a time.
4. To encourage co-operation with other institutions and funds working towards strengthening the economy with the aim of co-ordinating industrial counselling and support actions and making them more effective.
5. To discuss plans which the Institute is working on as well reports regarding the Institute's activities.
6. To discuss and approve the annual accounts.
7. To decide on the total amounts to be borrowed, cf. Article 15.
8. To decide on share acquisitions and participation in holding companies, investment companies, and development associations.
9. To establish rules regarding loan terms and project funding.
10. To make decisions and establish rules regarding the granting of loans and guarantees.
11. Other regional and industrial development tasks that the Minister of Industry may assign to the Board of Directors.

The Minister of Industry shall appoint the Director of the Institute of Regional Development for a term of five years at a time, upon receiving the recommendation of the Board of Directors.

The tasks of the Director of the Institute of Regional Development are the following:
1. To administer the daily operations of the Institute.
2. To submit proposals to the Board of Directors regarding:
a. The organisation of the Institute;
b. A plan of operation and activities;
c. Points of emphasis in operations;
d. Borrowings and total lendings by the Institute;
e. Rules regarding loan terms.
3. Employment of personnel.
4. Other tasks which the Board of Directors may assigns to him/her.

The Minister of Industry shall submit to the Althing a proposal for a parliamentary resolution regarding a strategic regional development plan for a period of four years. The plan shall describe the objectives and policy of the government with regard to regional development, plans for action and the place that regional development policy occupies in relation to the economy in general as well as plans in the field of public services in Iceland.
The regional development plan shall describe the current situation and future prospects in regional development in Iceland.
The Minister of Industry shall prepare the regional development plan in co-operation with the Institute of Regional Development.
During the course of preparing the plan, the Minister shall consult with other ministries, municipalities and other parties as required.
The regional development plan shall be reviewed every two years.

The Institute of Regional Development shall gather data and conduct research, monitor economic and regional development and its principal contributing factors, as well as results obtained by public support measures in the field of economic and regional development, both in Iceland and in countries where circumstances are similar. The Institute may participate in international research projects and enter into agreements with universities, research institutions and other parties regarding research in this field.

The Institute of Regional Development plans and conducts counselling for the economy outside the area of the capital in co-operation with industrial development associations, municipalities, and other parties.
The Institute shall, in co-operation with parties that provide industrial counselling, work towards improving the organisation of industrial counselling and increasing the knowledge of consultants, with the aim of making counselling more effective, and to encourage more efficient use of financial resources.
The Institute of Regional Development may conclude agreements with industrial development associations, institutions, municipalities, independent consultants, and other parties, to provide industrial counselling for specific fields, industrial sectors, or geographical areas.

The Institute of Regional Development shall contribute funds for industrial development projects and innovative projects. The Board of Directors of the Institute shall decide which projects shall receive funding and seek partners for them. In reviewing individual projects the Board of Directors may, together with its partners, appoint project committees to act in an advisory capacity. The task of allocating funds to individual projects may also be assigned to industrial development associations.

The Institute of Regional Development shall grant loans or guarantees in accordance with its purpose, cf. Article 2.
The Board of Directors of the Institute may assign to the Director of the Institute the task of deciding individual loans in accordance with the rules established by the Board of Directors, cf. item 10 of Article 4.
The Institute's lending activities shall be audited separately from other operations. The financial objective of lending activities, in accordance with this Article, shall be to preserve the real-term value of the Institute's equity.
The Board of Directors of the Institute may decide to enter into agreements with financial institutions, entrusting the processing and collecting of loans, and other financial activities of the Institute, to such parties.

The Institute of Regional Development may fund high-risk projects in the field of industrial development and innovation in accordance with rules established by the Minister of Industry with due consideration of the proposals submitted by the Board of Directors.
Such activities shall primarily be funded by special contributions from the State Treasury.

The Minister of Industry shall submit an annual report to the Althing regarding the activities of the Institute of Regional Development and the progress of the regional development plan.
Annual statements shall be accompanied by a list of the Institute's projects and their financing.

The revenue of the Institute of Regional Development consists of the following:
1. Allocations from the State Treasury as decided by the State budget at each time; and
2. Capital gains.

To finance its operations, the Institute of Regional Development may borrow funds, within the limits established by the national budget, from domestic or foreign parties, either in its own name or through an intermediary.

The liquid assets of the Institute of Regional Development shall be kept in accounts in banks and savings banks, or in the form of secure bonds.

The Institute of Regional Development is exempted from all public levies and taxes of the State Treasury.

Members of the Board of Directors and all employees of the Institute of Regional Development are bound by confidentiality regarding any information that may come to their attention and should remain confidential according to law, the instructions of superiors, or the nature of the information concerned. Confidentiality shall remain in force after an employee ceases work for the Institute.

Further provisions regarding the organisation and activities of the Institute of Regional Development and the implementation of this Act may be determined by a regulation.

This Act shall enter into effect on 1 January 2000. As of that time, Act no. 64/1985 regarding the Institute of Regional Development, as amended, shall no longer be effective.

Upon entry into effect of this Act, the Minister of Industry shall appoint the Board of Directors of the Institute in accordance with Article 3 hereof, to serve in this capacity until the first Annual Meeting, which shall be held before 1 July 2000.