August 4, 2004, Introduced by Reps. Kolb, Meisner, Jamnick, Tobocman, Gillard, Lipsey, Accavitti and Farrah and referred to the Committee on Commerce.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
(MCL 125.2001 to 125.2093) by adding chapter 8a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 CHAPTER 8A
2 Sec. 88a. (1) The fund shall operate a center for
3 microenterprise development.
4 (2) As used in this chapter:
5 (a) "Center" or "center for microenterprise development"
6 means the center for microenterprise development operated under
7 the fund.
8 (b) "Community economic development organization" means a
9 nongovernmental, nonprofit organization that is tax-exempt under
10 section 501(c)(3) of the internal revenue code, 26 USC 501, that
11 has as its purpose the support of economic development and
1 employment opportunities.
2 (c) "Microenterprise business" means a new or existing
3 business with 5 or fewer employees and includes startup,
4 home-based, and self-employed individuals.
5 (d) "Microenterprise development advisory board" or "advisory
6 board" means the microenterprise development advisory board
7 created in section 88b.
8 (e) "Microenterprise development fund" is an account within
9 the fund to be used as provided in this chapter.
10 (f) "Microenterprise development organization" means a
11 community-based, nonprofit organization that is tax-exempt under
12 section 501(c)(3) of the internal revenue code, 26 USC 501, that
13 has a demonstrated capacity and plan for providing business
14 training, technical assistance, and business loans to
15 microenterprise business.
16 Sec. 88b. (1) The center for microenterprise development is
17 created under the fund.
18 (2) The center for microenterprise development shall be
19 funded by the microenterprise development fund. Costs for
20 supporting the administration of the center in a year shall not
21 exceed 10% of the funds disbursed from the microenterprise
22 development fund through loans and grants in that year.
23 (3) The fund shall deposit into the microenterprise
24 development fund all money appropriated or otherwise provided by
25 this state and any other money made available to the fund for the
26 center or to the center from any other source, public or
27 private.
1 (4) The microenterprise development advisory board is created
2 to advise the center on microenterprise development policies and
3 grant and loan allocations and awards.
4 (5) The members of the microenterprise development advisory
5 board shall be appointed by the governor and shall serve without
6 compensation. The members of the advisory board shall include
7 all of the following:
8 (a) Two representatives of microenterprise development
9 organizations.
10 (b) One representative of a university or community college
11 small business development center.
12 (c) The director of the family independence agency or his or
13 her designee.
14 (d) One representative of a nonprofit community financial
15 organization serving low-income communities.
16 (e) Two representatives of community economic development
17 organizations.
18 (f) The director of the Michigan state university extension
19 or his or her designee.
20 (g) The director of the department of labor and economic
21 growth or his or her designee as a nonvoting member of the
22 advisory board.
23 (6) Members shall be appointed to the advisory board for a
24 term of 3 years, with terms expiring on a rotating basis. Of the
25 members first appointed to the advisory board, 1/3 shall be
26 appointed to a term of 1 year, 1/3 shall be appointed to a term
27 of 2 years, and 1/3 shall be appointed to a term of 3 years.
1 (7) The governor shall appoint 1 member of the advisory board
2 to serve as the chairperson of the advisory board.
3 (8) The advisory board shall establish a schedule, location,
4 and agenda for its meetings. Meetings shall be held at least 4
5 times per year.
6 (9) The advisory board is responsible for, but not limited
7 to, all of the following:
8 (a) Recommending qualifications that must be met by
9 organizations making application for loan and grant funds.
10 (b) Recommending to the center allocation amounts for loans
11 and grants.
12 (c) Reviewing all applications for funding and reviewing
13 recommendations of the center for the granting of funds.
14 (d) Recommending information to be included in reports
15 required by the center.
16 (e) Evaluating all reports provided to and by the center.
17 (f) Recommending ways to increase the involvement of the
18 private sector in microenterprise development.
19 (10) Within 1 year after its creation, the microenterprise
20 development advisory board shall report to the department, the
21 governor, and each house of the legislature on the advisability
22 of creating a statewide nonprofit corporation to serve as the
23 center for microenterprise development for the purpose of making
24 application for federal and private source funding.
25 Sec. 88c. (1) Except as provided in section 88b, money in
26 the microenterprise development fund shall be used only to make
27 loans or grants to microenterprise development organizations in
1 this state for microenterprise development.
2 (2) Loans or grants to microenterprise development
3 organizations or community development organizations that include
4 microenterprise support and delivery services in this state shall
5 be used only for the following purposes:
6 (a) Administering a loan or loan guarantee program.
7 (b) Administering a revolving loan program.
8 (c) Providing business training and technical assistance to
9 persons whose household income falls at or below 185% of federal
10 poverty limits.
11 (d) Providing business loans to persons whose household
12 income falls at or below 185% of federal poverty limits.
13 (3) Grants to a microenterprise development organization for
14 administration, business training, and technical assistance shall
15 not exceed 50% of the operating costs of that microenterprise
16 development organization per year.
17 (4) Loans made from the fund to a microenterprise development
18 organization shall be for a term not to exceed 5 years at 0%
19 interest and shall be renewable.
20 (5) Loans or grants from a microenterprise development
21 organization to a microenterprise business shall not exceed
22 $15,000.00 per year. However, at least 50% of the loans or
23 grants made from a microenterprise development organization shall
24 not exceed $5,000.00.
25 Sec. 88d. (1) The center shall make grants and loans
26 described in this section to microenterprise development
27 organizations based on the following criteria as determined by
1 the center:
2 (a) A plan for providing business development training,
3 technical assistance, loans, and grants to microenterprise
4 businesses.
5 (b) The scope of the business development training and
6 technical assistance services to be provided to microenterprise
7 businesses.
8 (c) A plan for coordinating the business development
9 training, technical assistance, loans, and grants of the
10 microenterprise development organization with commercial and
11 other nonprofit financial institutions.
12 (d) The geographic representation of all regions of this
13 state, including both urban and rural areas.
14 (e) The ability of the microenterprise development
15 organization to provide microenterprise development in areas of
16 chronic economic distress and low income regions of this state.
17 (f) A plan and the capacity for providing business training,
18 technical assistance, and business loans to persons whose
19 earnings fall at or below 185% of federal poverty limits.
20 (g) The ability of the microenterprise development
21 organization to provide financial oversight of loans and grants
22 under this chapter.
23 (2) As a condition of receiving a loan or grant under this
24 chapter, the recipient microenterprise development organization
25 shall provide periodic performance reports as determined by the
26 center.
27 Sec. 88e. The center shall report to the governor and each
1 house of the legislature each year on all of the following:
2 (a) The amount of all loans and grants, individually
3 identified, to each microenterprise development organization.
4 (b) The amount and recipient of every loan and grant made by
5 a microenterprise development organization.
6 (c) Types and individual units of business training and
7 technical assistance provided by microenterprise development
8 organizations.
9 (d) The percentage of business training, technical
10 assistance, and loans that were provided to persons whose
11 earnings fall at or below federal poverty limits.
12 (e) An evaluation of the demand and the effectiveness of
13 this program based on developing new, and increasing the capacity
14 of existing, microenterprise businesses in this state;
15 strengthening the capacity of microenterprise development
16 organizations; enhancing the earning capacity and reducing the
17 dependence on public services of individuals and families
18 receiving business training, technical assistance, and loans
19 through the center's grant and loan programs; and funds provided
20 by other public and private entities that were leveraged through
21 the programs described in this chapter.