March 18, 2008, Introduced by Reps. McDowell, Lahti, Tobocman and Melton and referred to the Committee on Commerce.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
(MCL 125.2001 to 125.2094) by adding chapter 7A.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
CHAPTER 7A
Sec. 79. (1) The fund shall operate a center for
microenterprise development.
(2) As used in this chapter:
(a) "Center" or "center for microenterprise development" means
the center for microenterprise development operated under the fund.
(b) "Community economic development organization" means a
nongovernmental, nonprofit organization that is tax-exempt under
section 501(c)(3) of the internal revenue code, 26 USC 501, that
has as its purpose the support of economic development and
employment opportunities.
(c) "Michigan microenterprise fund" is an account within the
fund to be used as provided in this chapter.
(d) "Microenterprise business" means a new or existing
business with 5 or fewer employees and includes startup, home-
based, and self-employed individuals.
(e) "Microenterprise development advisory board" or "advisory
board" means the microenterprise development advisory board created
in section 79a.
(f) "Microenterprise development organization" means a
community-based, nonprofit organization that is tax-exempt under
section 501(c)(3) of the internal revenue code, 26 USC 501, that
has a demonstrated capacity and plan for providing business
training, technical assistance, and business loans to
microenterprise business.
Sec. 79a. (1) The center for microenterprise development is
created under the fund.
(2) The center for microenterprise development shall be funded
by the Michigan microenterprise fund. Costs for supporting the
administration of the center in a year shall not exceed 10% of the
funds disbursed from the Michigan microenterprise fund through
loans and grants in that year.
(3) The fund shall deposit into the Michigan microenterprise
fund all money appropriated or otherwise provided by this state and
any other money made available to the fund for the center or to the
center from any other source, public or private.
(4) The microenterprise development advisory board is created
to advise the center on microenterprise development policies and
grant and loan allocations and awards.
(5) The members of the microenterprise development advisory
board shall be appointed by the governor and shall serve without
compensation. The members of the advisory board shall include all
of the following:
(a) Two representatives of microenterprise development
organizations.
(b) One representative of a university or community college
small business development center.
(c) The director of the family independence agency or his or
her designee.
(d) One representative of a nonprofit community financial
organization serving low-income communities.
(e) Two representatives of community economic development
organizations.
(f) The director of the Michigan state housing development
authority or his or her designee.
(g) The director of the department of labor and economic
growth or his or her designee.
(6) Members shall be appointed to the advisory board for a
term of 3 years, with terms expiring on a rotating basis. Of the
members first appointed to the advisory board under subsection
(5)(a), (b), and (d), 2 shall be appointed to a term of 1 year, 2
shall be appointed to a term of 2 years, and 2 shall be appointed
to a term of 3 years.
(7) The governor shall appoint 1 member of the advisory board
to serve as the chairperson of the advisory board.
(8) The advisory board shall establish a schedule, location,
and agenda for its meetings. Meetings shall be held at least 4
times per year.
(9) The advisory board is responsible for, but not limited to,
all of the following:
(a) Recommending qualifications that must be met by
organizations making application for loan and grant funds.
(b) Recommending to the center allocation amounts for loans
and grants.
(c) Reviewing all applications for funding and reviewing
recommendations of the center for the granting of funds.
(d) Recommending information to be included in reports
required by the center.
(e) Evaluating all reports provided to and by the center.
(f) Recommending ways to increase the involvement of the
private sector in microenterprise development.
(10) Within 1 year after its creation, the microenterprise
development advisory board shall report to the department, the
governor, and each house of the legislature on the advisability of
creating a statewide nonprofit corporation to serve as the center
for microenterprise development for the purpose of making
application for federal and private source funding.
Sec. 79b. (1) Except as provided in section 79a, money in the
Michigan microenterprise fund shall be used only to make loans or
grants to microenterprise development organizations in this state
for microenterprise development.
(2) Loans or grants to microenterprise development
organizations or community development organizations that include
microenterprise support and delivery services in this state shall
be used only for the following purposes:
(a) Administering a loan or loan guarantee program.
(b) Administering a revolving loan program.
(c) Providing business training and technical assistance to
persons whose household income falls at or below 185% of federal
poverty limits.
(d) Providing business loans to persons whose household income
falls at or below 185% of federal poverty limits.
(3) Grants to a microenterprise development organization for
administration, business training, and technical assistance shall
not exceed 50% of the operating costs of that microenterprise
development organization per year.
(4) Loans made from the fund to a microenterprise development
organization shall be for a term not to exceed 5 years at 0%
interest and shall be renewable.
(5) Loans or grants from a microenterprise development
organization to a microenterprise business shall not exceed
$25,000.00 per year. However, at least 50% of the loans or grants
made from a microenterprise development organization shall not
exceed $10,000.00.
Sec. 79c. (1) The center shall make grants and loans described
in this section to microenterprise development organizations based
on the following criteria as determined by the center:
(a) A plan for providing business development training,
technical assistance, loans, and grants to microenterprise
businesses.
(b) The scope of the business development training and
technical assistance services to be provided to microenterprise
businesses.
(c) A plan for coordinating the business development training,
technical assistance, loans, and grants of the microenterprise
development organization with commercial and other nonprofit
financial institutions.
(d) The geographic representation of all regions of this
state, including both urban and rural areas.
(e) The ability of the microenterprise development
organization to provide microenterprise development in areas of
chronic economic distress and low income regions of this state.
(f) A plan and the capacity for providing business training,
technical assistance, and business loans to persons whose earnings
fall at or below 185% of federal poverty limits.
(g) The ability of the microenterprise development
organization to provide financial oversight of loans and grants
under this chapter.
(2) As a condition of receiving a loan or grant under this
chapter, the recipient microenterprise development organization
shall provide periodic performance reports as determined by the
center.
Sec. 79d. The center shall report to the governor and each
house of the legislature each year on all of the following:
(a) The amount of all loans and grants, individually
identified, to each microenterprise development organization.
(b) The amount and recipient of every loan and grant made by a
microenterprise development organization.
(c) Types and individual units of business training and
technical assistance provided by microenterprise development
organizations.
(d) The percentage of business training, technical assistance,
and loans that were provided to persons whose earnings fall at or
below federal poverty limits.
(e) An evaluation of the demand and the effectiveness of this
program based on developing new, and increasing the capacity of
existing, microenterprise businesses in this state; strengthening
the capacity of microenterprise development organizations;
enhancing the earning capacity and reducing the dependence on
public services of individuals and families receiving business
training, technical assistance, and loans through the center's
grant and loan programs; and funds provided by other public and
private entities that were leveraged through the programs described
in this chapter.