BILL REQ. #:  S-4447.1 

Read first time 01/19/2006.   Referred to Committee on International Trade & Economic Development.

     AN ACT Relating to microenterprise development; adding new sections to chapter 43.330 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) Microenterprises are an important portion of Washington's economy, providing approximately twenty percent of the employment in Washington and playing a vital role in job creation.
     (b) While community-based microenterprise development organizations have expanded their assistance to their microentrepreneur customers in recent years, there remains a lack of access to capital, training, and technical assistance for low-income microentrepreneurs.
     (c) Support for microenterprise development offers a means to expand business and job creation in low-income communities in both rural and urban areas of the state.
     (d) 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) It is the purpose of this act to assist microenterprises in job creation by increasing the training, technical assistance, and financial resources available to microenterprises. It is the intention of the legislature to carry out this purpose by enabling the department of community, trade, and economic development to contract with a statewide microenterprise association with the potential to provide organizational support and administer grants to local microenterprise development organizations, subject to the requirements of this act, and to leverage additional funds from sources other than moneys appropriated from the general fund.

NEW SECTION.  Sec. 2   A new section is added to chapter 43.330 RCW to read as follows:
     The definitions in this section apply throughout sections 1 through 3 of this act unless the context clearly requires otherwise.
     (1) "Financial institution" means a bank, trust company, mutual savings bank, savings and loan association, or credit union authorized to do business in this state under state or federal law.
     (2) "Microenterprise development organization" means a community development corporation, a nonprofit development organization, a nonprofit social services organization or other locally operated nonprofit entity that provides services to low-income entrepreneurs.
     (3) "Statewide microenterprise association" means a nonprofit entity with microenterprise development organizations as members that serves as an intermediary between the department of community, trade, and economic development and local microenterprise development organizations.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.330 RCW to read as follows:
     The microenterprise development program is established in the department of community, trade, and economic development. In implementing the program, the department:
     (1) Shall provide organizational support to a statewide microenterprise association and shall contract with the association for the delivery of services and distribution of grants;
     (a) The association shall serve as the department's agent in carrying out the purpose and service delivery requirements of this section;
     (b) The association's contract with the department shall specify that in administering the funds provided for under subsections (3), (7), and (8) of this section, the association may use no greater than ten percent of the funds to cover administrative expenses;
     (2) Shall provide funds for capacity building for the statewide microenterprise association and microenterprise development organizations throughout the state;
     (3) Shall provide grants to microenterprise development organizations for the delivery of training and technical assistance services;
     (4) Shall identify and facilitate the availability of state, federal, and private sources of funds which may enhance microenterprise development in the state;
     (5) Shall develop with the statewide microenterprise association criteria for the distribution of grants to microenterprise development organizations. Such criteria may include:
     (a) The geographic representation of all regions of the state, including both urban and rural communities;
     (b) The ability of the microenterprise development organization to provide business development services in low-income communities;
     (c) The scope of services offered by a microenterprise development organization and their efficiency in delivery of such services;
     (d) The ability of the microenterprise development organization to monitor the progress of its customers and identify technical and financial assistance needs;
     (e) The ability of the microenterprise development organization to work with other organizations, public entities, and financial institutions to meet the technical and financial assistance needs of its customers;
     (f) The sufficiency of operating funds for the microenterprise development organization; and
     (g) Such other criteria as agreed by the department and the association;
     (6) Shall require the statewide microenterprise association and any microenterprise development organization receiving funds through the microenterprise development program to raise and contribute to the effort funded by the microenterprise development program an amount equal to twenty-five percent of the microenterprise development program funds received. Such matching funds may come from private foundations, federal or local sources, financial institutions, or any other source other than funds appropriated from the legislature;
     (7) May provide loans to local microenterprise revolving loan funds to make microloans exclusively to low-income microentrepreneurs;
     (8) May provide loans to a guarantee fund from which local microenterprise development organizations may guarantee loans made by financial institutions to microenterprises. The guarantee fund may be operated by the statewide microenterprise association or any other private or public entity which the department determines has the requisite expertise;
     (9) Shall require an annual accounting and report from the statewide microenterprise association it contracts with, to include such outcome measures as the department specifies; and
     (10) May adopt rules as necessary to implement this section.