71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1680
A-Engrossed
House Bill 2406
Ordered by the House March 2
Including House Amendments dated March 2
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Representative Susan
Morgan, Representative Tim Knopp and Representative Jeff
Merkley for Oregon Micro Enterprise Network)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Creates microenterprise development program to establish
infrastructure for delivery of microlending services and training
and technical assistance. Authorizes Economic and Community
Development Department to make grants to { + local + }
microenterprise support organizations. Authorizes department to
contract with statewide organizations to implement
microenterprise development program under certain conditions.
{ + Declares emergency, effective on passage. + }
A BILL FOR AN ACT
Relating to support services to microenterprises; limiting
expenditures; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 8 of this 2001 Act shall be known
and may be cited as the Microenterprise Development Act. + }
SECTION 2. { + As used in sections 2 to 8 of this 2001 Act:
(1) 'Local microenterprise support organization' means a
community development corporation, a nonprofit development
organization, a nonprofit social services organization or another
locally operated nonprofit entity that provides services to
disadvantaged entrepreneurs.
(2) 'Low income' means income adjusted for family size that
does not exceed:
(a) For metropolitan areas, 80 percent of median income; or
(b) For nonmetropolitan areas, the greater of 80 percent of the
area median income or 80 percent of the statewide nonmetropolitan
area median income.
(3) 'Microenterprise' has the meaning given that term under 15
U.S.C. 6901, as amended and in effect on the effective date of
this 2001 Act.
(4) 'Microentrepreneur' means an individual conducting a
microenterprise.
(5) 'Microlending' means the practice of lending moneys to
microenterprises or microentrepreneurs.
(6) 'Microloan' means a business loan that is made to a
microenterprise or microentrepreneur in an amount up to $35,000.
(7) 'Statewide microenterprise support organization' means a
community development corporation, a nonprofit development
organization, a nonprofit social services organization or another
nonprofit entity that serves as an intermediary between the
Economic and Community Development Department and local
microenterprise support organizations.
(8) 'Training and technical assistance' means services and
support offered to microenterprises and microentrepreneurs. '
Training and technical assistance' includes, but is not limited
to, services to enhance business development, planning,
marketing, management skills and access to financial services.
(9) 'Very low income' means income adjusted for family size
that does not exceed 150 percent of the poverty level determined
under 42 U.S.C. 9902, as amended and in effect on the effective
date of this 2001 Act. + }
SECTION 3. { + (1) The Legislative Assembly finds that:
(a) There is a need to develop and expand businesses in
economically distressed communities in both rural and urban
areas;
(b) There is a need to assist Oregonians who are unemployed,
underemployed or in low income jobs;
(c) Microenterprises can provide a means for unemployed,
underemployed or low income individuals to find and sustain
productive work;
(d) Microenterprises, including self-employment, can enable
people with disabilities to use their management skills to create
and provide products and services, to acquire new skills in money
management and business development and to develop pride and
self-esteem;
(e) Microenterprises can provide opportunities for economically
distressed communities to thrive, one microentrepreneur at a
time;
(f) Microenterprises, including self-employment and start-up
businesses, are important elements of the Oregon economy and play
a vital role in job creation;
(g) There is a lack of access to capital and training and
technical assistance for low income and very low income
microentrepreneurs;
(h) Many low income and very low income microentrepreneurs need
microlending services and training and technical assistance to
start, operate or expand their businesses;
(i) Local microenterprise support organizations have
demonstrated cost-effective delivery methods for providing
microlending services and training and technical assistance; and
(j) Local and state charitable foundation support, federal
program funding and private sector support can be leveraged by a
statewide program for development of microenterprises.
(2) The purposes of sections 2 to 8 of this 2001 Act are to:
(a) Ensure that microenterprises in Oregon are able to realize
their full potential to create jobs, enhance entrepreneurial
skills, expand entrepreneurial activity and increase the capacity
of low income and very low income households to become
self-sufficient;
(b) Provide funding to foster the creation of microenterprises;
(c) Establish the Economic and Community Development Department
as the agency responsible for statewide coordination and
facilitation of microenterprise development and microlending;
(d) Enhance the development of a statewide infrastructure for
microenterprise support;
(e) Enable the department to provide grants to local
microenterprise support organizations to foster the development
and growth of microenterprises throughout Oregon; and
(f) Enable the department to engage in contractual
relationships with statewide microenterprise support
organizations that have the capacity to administer grants to
local microenterprise support organizations, subject to sections
2 to 8 of this 2001 Act, and to leverage additional funds from
sources other than moneys appropriated from the General Fund. + }
SECTION 4. { + (1) The Economic and Community Development
Department shall by rule establish standards, objectives and
criteria for the implementation of a microenterprise development
program for the purposes stated in section 3 of this 2001 Act.
(2) The microenterprise development program may include:
(a) Outreach to diverse, low income and rural populations;
(b) Assessment, training and technical assistance;
(c) Access to microloans;
(d) Access to markets;
(e) Asset development programs such as the individual
development account program; and
(f) Coordination with and links to resources for
microentrepreneurs.
(3) In establishing the standards, objectives and criteria for
the implementation of the microenterprise development program,
the department shall consider how the microenterprise development
program will be integrated with emerging small business
assistance programs.
(4) The department shall make grants to one or more local
microenterprise support organizations to establish a statewide
infrastructure for the purpose of supporting microenterprises as
provided under section 3 of this 2001 Act.
(5) The maximum grant amount under subsection (4) of this
section shall be $100,000. However, if the department determines
that a local microenterprise support organization makes a
substantial positive impact in an otherwise unserved or
underserved distressed community and has the capacity to make a
greater positive impact, the department may grant an additional
amount not to exceed $150,000.
(6) The department shall focus grant funds on projects that
benefit low income and very low income microentrepreneurs. + }
SECTION 5. { + (1) The Economic and Community Development
Department shall convene an interagency work group on
microenterprise development.
(2) The work group established under this section shall consist
of representatives from:
(a) The Adult and Family Services Division of the Department of
Human Services;
(b) The Employment Department;
(c) The Economic and Community Development Department;
(d) The Housing and Community Services Department;
(e) The State Department of Agriculture;
(f) The Advocate for Minority, Women and Emerging Small
Business in the Office of the Governor;
(g) Other state agencies whose work relates to microenterprise
activity in Oregon; and
(h) Statewide microenterprise support organizations that
receive a contract under section 3 of this 2001 Act.
(3) The work group established under this section shall meet
regularly to coordinate the work of state agencies related to
microenterprise activity and to develop a coherent framework for
state agency efforts related to microenterprise activity. + }
SECTION 6. { + (1) When considering an application for grant
funding from a local microenterprise support organization, the
Economic and Community Development Department shall consider:
(a) The scope of services to be delivered;
(b) The extent to which the local microenterprise support
organization has developed a viable plan for providing
microlending services and training and technical assistance to
microenterprises;
(c) The extent to which the plan provides for coordination of
services with services provided by other entities, including
commercial lending services and other business development
services providers;
(d) The extent to which the plan distinguishes the delivery of
microlending services and training and technical assistance;
(e) The extent to which the plan establishes a preference for
providing microlending services to a large number of
microentrepreneurs by limiting the size of individual microloans;
(f) The necessity of delivering microenterprise support
services to all regions in the state;
(g) The ability of the local microenterprise support
organization to provide microenterprise support services in
distressed communities, both rural and urban;
(h) The ability of the local microenterprise support
organization to provide training and technical assistance to low
income and very low income local microentrepreneurs;
(i) The ability of the local microenterprise support
organization to provide financial oversight for microloan
recipients;
(j) The ability of the local microenterprise support
organization to provide periodic reports on performance and
outcomes of the activities supported by the grant provided; and
(k) The source and sufficiency of operating funds of the local
microenterprise support organization.
(2) A local microenterprise support organization may use grant
funds received to:
(a) Satisfy matching funds requirements for federal or private
grants supporting microenterprise development activities;
(b) Establish a revolving fund from which to make microloans;
(c) Establish a fund with which to guarantee loans to
microenterprises from commercial lending institutions; and
(d) Provide funding for microlending services and for training
and technical assistance provided by the local microenterprise
support organization.
(3) A local microenterprise support organization shall:
(a) Match grant funds on a dollar-for-dollar basis, from a
source other than moneys appropriated from the General Fund, for
each General Fund dollar received; and
(b) Use no more than 10 percent of grant funds received for
administrative expenses. + }
SECTION 7. { + (1) The Economic and Community Development
Department shall submit a biennial report to the Governor and the
Legislative Assembly that includes:
(a) A description of demand for the program among
microenterprises;
(b) A listing of grants made, including the recipient and
amount of each grant;
(c) The impact of grants made;
(d) A description of the extent to which the operation of the
microenterprise development program complements the services and
activities of the department and the state system of small
business development centers;
(e) A description of the partnerships between commercial
lending institutions and local microenterprise support
organizations that have resulted from grants made under the
microenterprise development program; and
(f) An evaluation of the performance of the microenterprise
development program based on documented goals and accomplishments
of participating local microenterprise support organizations and
microenterprises.
(2) If the department makes an evaluation under subsection
(1)(f) of this section, the department shall assess and report on
the performance of the microenterprise development program using
the following measures:
(a) The number and percentage of households with improved
income and assets;
(b) The survival rate of businesses;
(c) The number of jobs created and retained; and
(d) The number and percentage of clients expressing
satisfaction with the provided technical assistance. + }
SECTION 8. { + (1) The Economic and Community Development
Department may contract with one or more statewide
microenterprise support organizations to implement the
microenterprise development program.
(2) The department may authorize a statewide microenterprise
support organization to:
(a) Solicit, review and give preliminary approval to
applications from local microenterprise support organizations for
grant funding; and
(b) Administer and provide financial oversight for grants
provided to local microenterprise support organizations.
(3) When contracting with a statewide microenterprise support
organization, the department shall:
(a) Approve decisions related to applications for grant
funding;
(b) Approve administrative action required for administrative
and financial oversight of local microenterprise support
organizations; and
(c) Limit administrative expenses of the statewide
microenterprise support organization to no more than 10 percent
of the grant funds expended by or distributed through the
statewide organization under subsection (2) of this section. + }
SECTION 9. { + Notwithstanding any other law, the amount of
$___ is established for the biennium beginning July 1, 2001, as
the maximum limit for payment of expenses from fees, moneys or
other revenues, including Miscellaneous Receipts, lottery funds
and federal funds, collected or received by the Economic and
Community Development Department for the purposes specified in
section 3 of this 2001 Act. + }
SECTION 10. { + This 2001 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2001 Act takes effect on
its passage. + }
----------